Draft budget of the federal government Cabinet approves of high New debt

Status: 23.06.2021 12:18 p.m.

The federal government will also take on massive debts in the coming year. The cabinet approved the draft budget, which provides for new borrowing of almost 100 billion euros for 2022. The debt brake will be suspended again for this. The federal cabinet has approved the government draft for the federal budget for 2022. Once again, the approved budget is shaped by the consequences of the Corona crisis. According to the draft, the federal government wants to incur more new debts in the coming year than previously planned. A net borrowing of 99.7 billion euros is planned, as can be seen from a cabinet proposal. The high level of new borrowing is justified with additional spending as a result of the corona pandemic, for example for corporate aid and to stabilize social contributions.

Debts grow to 470 billion euros

In the benchmarks presented in March, the Ministry of Finance had expected a net borrowing of 81.5 billion euros for 2022. Tax revenues remain below pre-crisis levels. This would mean that the mountain of debt accumulated by the corona pandemic between 2020 and 2022 would grow to around 470 billion euros. However, there are now plans to increase spending on climate protection and health, for example. The federal government had already taken on billions in new debts in 2020 and 2021. The budget plans are, so to speak, subject to change, because the new Bundestag elected in autumn has to pass the budget. There could therefore still be significant changes.

Debt brake suspended again

According to the draft, the debt brake anchored in the Basic Law will also be suspended in the coming year against the background of the Corona crisis. It stipulates that the federal government may only take out new loans to a very small extent – a maximum of 0.35 percent of economic output. According to the draft, the federal government no longer wants to make use of the exemption from 2023. In the afternoon, Federal Finance Minister Olaf Scholz wants to present his budget plan

background

Controversial herbicide glyphosate Checked and undesirable

As of: 23.06.2021 12:55 p.m.

A test report commissioned by the EU does not consider the weed killer glyphosate to be carcinogenic or dangerous to the genetic makeup. Nevertheless, the drug will probably disappear from the market in Europe.

From Michael Heussen, WDR

The specialist authorities from France, Sweden, Hungary and the Netherlands come to terms with glyphosate to a clear result : The pesticide is not carcinogenic, it does not damage the genetic material and it is neither dangerous for human organs nor for the hormonal balance. The four national authorities had assessed the safety of glyphosate on behalf of the European Commission on the basis of existing study results. You confirm the findings of test authorities around the world.

Nevertheless, it can be assumed that the drug will disappear from the market sooner or later. “Glyphosate is socially dead,” said a farmer official in the run-up to the farmers’ day in Berlin. The public had long since made its judgment – even with solid scientific arguments, the majority of consumers could not be convinced of the harmlessness of the substance. Since 2015, the judgment of the International Agency for Research on Cancer, which belongs to the World Health Organization (WHO), has been hovering over the evaluation process like a sword of Damocles: Glyphosate is “probably carcinogenic”.

“Very low probability”

It is hardly surprising that the glyphosate producer Bayer sees it differently and welcomes the positive study results that have now been published. The chemical giant, which with the US-American Monsanto group also took over its glyphosate-containing bestseller Roundup, also rejects another argument – that the herbicide threatens biodiversity.

“Evaluated scientific studies as well as publicly available research reports show only a very low probability that the proper use of glyphosate-containing pesticides has indirect effects on the biodiversity of most food chains,” says the company. For example, the effects on microorganisms living in the soil, worms, birds, pollinating insects such as honey bees, frogs and other amphibians as well as fish have been investigated, according to a Bayer spokesman. So could it happen that glyphosate may also be used in the European Union beyond the approval period that expires at the end of 2022? Much speaks against it.

The Bayer Group sees itself confirmed by the current audit at EU level. Image: dpa

Federal government expects glyphosate to be phased out by 2024

The Federal Environment Ministry, led by Svenja Schulze (SPD), firmly expects that no more glyphosate-containing pesticides may be used from January 1, 2024 at the latest after the end of the one-year transition period. “In agreement with the Federal Ministry of Agriculture, we continue to assume that the Federal Government (…) has decided to phase out glyphosate use in accordance with EU law,” it says WDR -Inquiry . About the corresponding amending regulation the Federal Council will decide next Friday. Until the end of the transition period, the application “may only take place if there are no alternative options, for example in the case of weeds that are difficult to control or areas at risk of erosion” – so it is in the voting proposal. Its use on areas that serve the general public, as well as in house and allotment gardens, is completely forbidden.

No further approval expected at EU level

Federal Minister of Agriculture Julia Klöckner (CDU) has also emphasized several times, a spokeswoman for her ministry told the WDR “It cannot be assumed that there will still be a majority after 2022 in favor of an extension of the glyphosate approval at EU level”.

In 2017, the dispute over glyphosate between the ministries almost led to a coalition crisis in Berlin. Because the former Agriculture Minister Christian Schmidt (CSU) voted “yes” in the responsible EU committee in Brussels , although the then Federal Environment Minister Barbara Hendricks (SPD) strictly against an extension of the approval for glyphosate was. The different evaluations of the current incumbents are not so obvious. But in the letters of reply to the questions of the WDR There are differences: “Glyphosate-containing pesticides are important for soil-conserving and water-saving cultivation of arable land, especially in areas prone to erosion,” writes the Klöckner spokeswoman. Schulze’s spokesman, on the other hand, emphasizes the dangers for biodiversity: “As a total herbicide, glyphosate destroys all plants indiscriminately and thus destroys the food and livelihood for many insect species such as butterflies and, indirectly, for field birds such as the skylark.”

EU assessment expected in 2022

At the European level, the European Food Safety Authority EFSA and the European Chemicals Agency ECHA will start public participation at the beginning of September – results are expected in one year.

Bayer AG continues to rely on the controversial herbicide. Europe does not play a major role as a sales market. The agricultural countries in North and South America are more important. In the USA around ten billion euros have to be paid in the context of a settlement to 96,000 plaintiffs who blame glyphosate for their cancer, and billions more will be due for future plaintiffs . Bayer therefore wants to limit its use for private customers – but Roundup should continue to be used in large-scale agriculture. Only the warning notices should be made clearly more visible. glyphosate The weed killer glyphosate was developed by Bayer subsidiary Monsanto and marketed under the brand name Roundup. The herbicide is also manufactured by other companies, as the patent has expired for years. Bayer is faced with around 9,300 plaintiffs because of the weed killer in the United States, as glyphosate is suspected of being carcinogenic. This is based on the assessment of the International Agency for Cancer Research (IARC), which classified the active ingredient as “probably carcinogenic” in 2015. The Bayer Group always emphasizes that glyphosate is safe when used properly and relies on a large number of scientific studies.

At the end of 2017, the EU Commission extended the approval of glyphosate by five years and now has to make a new decision. A first round of talks is to take place in September and then the EU member states will be involved. Against this background, the EU Commission commissioned the assessment group for glyphosate (consisting of the testing authorities in France, Hungary, the Netherlands and Sweden) to prepare a draft of the risk assessment. This 11,000-page draft was submitted to the European Food Safety Authority (EFSA) and the European Chemicals Agency (ECHA) in mid-June 2021. A final recommendation from EFSA can be expected in the second half of 2022 after the submission has been examined

Energy and climate package Triple steps or big litter?

Status: 22.06.2021 4:35 p.m.

Shortly before the summer break, the Union and the SPD agreed on an energy and climate package. It is intended to help achieve the goals of the new Climate Protection Act. According to this, Germany should be greenhouse gas neutral by 2045.

From Martin Polansky, ARD capital studio

Shortly before the end of the legislative period, the Bundestag is due to pass the stricter climate protection law this week. And now the Union and the SPD have agreed on a package with initial measures on how the more ambitious climate targets are to be achieved in the coming years. The chairwoman of the Union in the Bundestag Environment Committee, Anja Weisgerber from the CSU, welcomes the agreement. “It is definitely a clear step forward. And with everything we also pay attention to the effects on the economy, on jobs and people’s acceptance.”

Expansion of renewable energies – with restrictions

The government groups have specifically agreed on additional new wind and solar systems in the coming year, on simplified repowering, in which old wind turbines will be replaced by new and higher ones. CSU environmental expert Weisgerber emphasizes that the effects on species protection and noise emissions should continue to be examined. But simplified approval procedures are necessary in order to expand renewable energies more quickly and thus achieve the climate targets. The agreement also provides financial benefits for communities that provide rural open spaces for solar systems. The Union and the SPD could not agree on a faster increase in the CO2 price or the distribution of CO2 costs between tenants and landlords each half. And solar compulsory for new buildings is also off the table. This was not feasible with the Union, says the deputy SPD parliamentary group leader Matthias Miersch: “We cannot enforce this measure in such a constellation. I believe that the next government must first and foremost conclude a future pact between the federal, state and local governments , which provides for a binding expansion path for renewable energy sources. ”

Opposition and associations disappointed

Criticism of the resolutions comes from the opposition. The FDP speaks of campaign activism by the Union and the SPD, the Left calls the resolutions a sham campaign. The environmental expert of the Greens, Oliver Krischer, speaks of small, triple steps: “That is not what we need for climate protection. That is politics with our hands in our pockets and not the answer to the climate crisis.”

The BUND and the Paritätische Wohlfahrtsverband also criticize the resolutions as half-hearted: they are not only unambitious, but there is also no social compensation for tenants, for example. The Bundestag is to adopt the package of measures on Thursday together with the new climate protection law. This provides for Germany to become greenhouse gas neutral in 2045 – five years earlier than previously planned. In addition, the Federal Cabinet wants to launch an eight billion euro immediate program tomorrow to promote investments in the energy transition. However, the immediate program can only be finally adopted by the upcoming Bundestag

Heil is promoting training bonuses There should be no “Corona vintage”

Status: 06/22/2021 05:07

The second year of training since the beginning of the corona pandemic begins in September. The federal government supports training companies with training bonuses, but Labor Minister Heil is still worried about a corona kink on the apprenticeship market. Federal Labor Minister Hubertus Heil sees the German training market facing a critical phase after months of the pandemic. The number of apprenticeships like applicants had already decreased last year, said the minister. Figures from the Federal Institute for Vocational Education and Training prove this. The test comes this summer, “Heil told the Funke media group. “We are currently fighting the clock as the training year begins on September 1st.” It is clear: “We are not allowed to allow a Corona class in training.”

6000 euros bonus per apprenticeship position

Many companies were hesitant at the moment because they believed they could not afford apprentices at the moment. Heil called on companies to make greater use of state support offers such as the training bonus. The bonus has been approved for almost 40,000 training positions since last summer.

Heil pointed out that the new protective umbrella for training has been in place since the beginning of June. The premium was also doubled in March. Companies affected by a pandemic that keep their training quota have been receiving EUR 4,000 per apprenticeship position since the beginning of June, and EUR 6,000 for new trainee positions.

According to the Federal Ministry of Labor, the program has a total volume of 410 million euros for the current year. By mid-June, around 88 million euros, almost a fifth, had been paid out

FAQ

Statutory old-age provision How the pension is financed

Status: 21.06.2021 10:35 a.m.

It is and should remain the foundation of the old-age provision of millions of Germans: the statutory pension. How does our pension system work and what are the challenges it faces?

From Andreas Braun, tagesschau.de

How is the statutory pension basically organized?

The statutory pension in Germany is organized according to the so-called pay-as-you-go system. Those who pay in do not build up a capital stock that they can fall back on in old age, but rather finance the current earnings of the current pensioners. Anyone who pays into the statutory pension thus acquires a right to such a pension in old age, for which the next generation then has to pay. After a certain waiting period – currently five years – this entitlement is given. In order to receive a pension, you must also have reached a certain age (currently 67 years as a rule).

Who pays into the statutory pension fund?

Employees in Germany are required to pay into the statutory pension. Employers take over half of the payments into the pension fund. The contribution rate is currently 18.6 percent, so 9.3 percent each comes from employees and employers. Self-employed, freelancers or people who are not gainfully employed can also make voluntary contributions. All contributors acquire pension entitlements to which a certain pension amount corresponds. It is determined by so-called “remuneration points”.

How much does the federal government pay into the pension fund from tax revenues?

Since the income from contributors has long been unable to cover the expenses of the pension fund, the federal government co-finances the fund through tax revenue. In 2020, these expenditures exceeded the 100 billion euro mark for the first time. The federal budget provides 106 billion euros for 2021. That is more than a quarter of the federal budget. According to experts the proportion could rise to more than 50 percent of the budget in the coming decades .

What caused the deficit in the pension fund?

The demographic development in Germany is the main reason: The number of people paying into the pension system is facing an increasing number of pensioners. In 2020 there were 57 pensioners for every 100 contributors. In 2050, it is estimated that 100 contributors will make payments for 77 retirees. Since the pension level has always been adjusted upwards in line with the general wage level and there have been no pension cuts, the deficit is growing steadily.

What is meant by the “sustainability factor”?

In order to be able to take into account the ratio of contributors to pension recipients when calculating the pension amount, the “sustainability factor” was introduced in 2005. It should lead to the fact that the pension increases are dampened with an unfavorable ratio of contributors to pensioners. However, only a quarter of the factor is included in the calculation.

What are the “stop lines” set by politicians?

The legislator has provided so-called stop lines, which secure the pension level and at the same time limit the contributions to the pension fund. It is planned that the pension level (with 45 years of contribution) will not fall below 48 percent of current average earnings by 2025. A second stop line relates to the level of contributions from employers and employees. The contribution rate may not exceed 18.6 percent until 2025.

Why is the situation in the pension funds worsening?

The increasingly unfavorable ratio of contributors to pensioners – together with the state guarantees for the amount of pensions and contributions – will further exacerbate the funding gap in the pension insurance scheme in the years to come. The federal government has not yet made any fundamental changes to this system.

What are the options for reforming the pension system?

Proposals for reform target both the revenue and the expenditure side of the statutory pension insurance system. In order to increase the income, either the contribution rates could be increased. In addition, statutory compulsory insurance is also being discussed for additional groups of people such as self-employed or civil servants. On the expenditure side, the pension amount can be reduced on the one hand, and the retirement age can be increased on the other. A link to general life expectancy, for example, is conceivable. The income from the contributions paid in, and thus also the future pension amount, could also be increased by investing more contributions in the capital market.

What should the insured expect in the coming years?

The growing imbalance between income and expenditure in the statutory pension insurance will make reforms necessary in the coming years – economists and politicians of the most important parties see this equally. Contribution rates are likely to rise while average pension levels are lowered and working lives are further extended. In any case, it is likely to become even more important for the insured to make private provision for old age

Despite increased lockdown and persistently high incidence rates, the federal government expects higher economic growth this year than before. In his spring projection presented in the morning, Federal Minister of Economics Peter Altmaier is now assuming an increase in gross domestic product (GDP) of 3.5 percent. In January he had estimated a mere 3.0 percent. An increase of 3.6 percent is expected for 2022. “We will have regained our old strengths by 2022 at the latest,” said Altmaier. “Our economy is strong, robust and ready for a new start.” Last year it fell by 4.9 percent because of the Corona crisis.

Export is the mainstay

Nevertheless, Germany lags behind the USA and most of its European neighbors. The US economy is likely to grow by 6.5 percent this year, while France, Italy and Spain each expect an increase of between five and six percent. The recovery in Germany is said to be supported primarily by exports. These are expected to grow by 9.2 percent in view of the rapid recovery in important sales markets such as the USA and China. As a result, the ministry expects higher investments. “Catch-up effects also play a role, as investments have been postponed because of the crisis,” it said. The construction boom is also likely to continue, “due to the low interest rate environment and high demand for housing”.

Export expectations at a ten-year high

The hopes for the export industry in particular are justified. German exporters are currently as optimistic as they were last in January 2011. The barometer for industry’s export expectations climbed by 0.8 to 24.6 points in April, according to a recent survey by the Munich Ifo Institute. “In many countries, industry is hardly affected by the pandemic,” said Ifo President Clemens Fuest. “The demand for German export goods will benefit significantly from this.” The upswing in the USA and China, the most important export customers, is providing a boost. According to the ifo data, the outlook has improved across almost all branches of industry. In the electrical industry, expectations are very optimistic. In mechanical engineering, too, the indicator rose to its highest value in more than a decade; the chemical industry is also on the upswing. “The only problem children are manufacturers of clothing and other vehicle construction,” it said. “You are expecting a decline in foreign sales.”

The domestic economy is only slowly gaining momentum

The gradual easing of the corona restrictions should also gradually give the domestic economy and private consumer spending a boost. After the difficult start to the year, the labor market is expected to gradually pick up. Nevertheless, there is likely to be a decrease in the number of people in employment by 60,000 in 2021. An increase in employment of 290,000 is to follow in 2022. Altmaier’s optimism about the economy is shared by Finance Minister Olaf Scholz. “The third corona wave is currently requiring all of us to make another great effort,” said the SPD candidate for chancellor. “Nevertheless, it is clear: things are slowly improving and the aid policy is working.” The council of experts for assessing macroeconomic developments, colloquially known as the “economic methods”, is significantly more pessimistic than the government. The committee had only revised its forecast downwards two weeks ago and is only expecting an increase in gross domestic product of 3.1 percent for 2021. In the autumn, the economic wise men had assumed 3.7 percent.

The European Union’s Corona Reconstruction Fund has a total volume of 750 billion euros. With the help of the money, the member states should lead their respective economies out of the coronavirus valley and at the same time provide impetus for important future investments and reform measures. The federal government expects EU subsidies of 25.6 billion euros (net without VAT). The gross expenditures mentioned in the federal budget are then a total of almost 28 billion euros. The Federal Cabinet approved Finance Minister Olaf Scholz’s plan of what exactly should be financed. Around 90 percent of the money is to be invested in climate protection and digitization.

Greens: Not new, just financed differently

“Climate protection is the greatest challenge of our time,” said Scholz at a joint press conference with France’s Finance Minister Bruno Le Maire. Around 11.5 billion euros are therefore earmarked for climate-friendly mobility, hydrogen and building modernization. More than 14 billion euros are expected to flow into the digital transformation. These investments should in turn have a positive effect on overall economic output and employment. The Greens criticized that Germany is now financing measures that are already planned – just differently. In addition, hardly any money flows into structural reforms. 80 percent of the measures in the development plan are already part of the German economic stimulus program, said Green European politician Sven Giegold. They are therefore not spending more on climate protection or digitization.

EU members commit to implementation

The construction aid agreed in summer 2020 is intended to help the 27 EU countries get back on their feet after the pandemic. Part of the money is available as grants and part as a loan. For the first time, the EU Commission is allowed to take on large amounts of debt for the 750 billion package. The largest sums are earmarked for Italy and Spain, which were particularly hard hit by the pandemic. Each individual state has to ratify the program and apply to the EU Commission for the specific use of the money in a development plan. EU Commission chief Ursula von der Leyen announced a detailed examination of whether the plans of the EU states meet the common high standards. “We know exactly where we want to go,” said von der Leyen. The goal is a greener, more digital and more crisis-proof Europe.

Money should flow in before the end of summer

Scholz wants to present Germany’s plan to the EU Commission this week – as do France, Spain and Italy. Italy, which is receiving more than 190 billion euros, wants to invest the money in high-speed trains, organic agriculture and judicial reform, among other things. Prime Minister Mario Draghi said it was about building the “Italy of tomorrow”. France’s Finance Minister Le Maire complained that the EU had lost too much time since the agreement on the reconstruction fund in July last year. China’s economy is already growing again and the US is booming. The EU must stay in the race. The EU Commission must therefore examine the national development plans as quickly as possible so that they can be approved by July at the latest. The money could then flow in before the end of summer.