Billion-dollar financial package: Hesse is facing crucial reforms!

The Bundestag passed a far-reaching change to the Basic Law with a two-thirds majority in order to enable a financial package worth billions for defense and infrastructure. The package, which includes new debt with a volume of up to one trillion euros, includes, among other things, the easing of the debt brake for areas such as defense and climate protection.

In order for the financial package to come into force, it still requires the approval of the Federal Council, which is expected on Friday. If the necessary votes are obtained, Hesse could have debt leeway of around 1.15 billion euros annually. 100 billion euros of the special fund are earmarked for infrastructure, which would mean around 750 million euros per year for Hesse over a period of ten years.

Reactions from business and the unions

The Hessian business associations and trade unions express different opinions about the new financial package. The Association of Hessian Business Associations (VhU) and the chemical industry are calling for clear reforms in addition to the planned investments. Dirk Meyer, CEO of HessenChemie, emphasizes that debt-financed programs alone are not enough, while Wolfgang Große Entrup, CEO of the Chemical Industry Association, calls for cost reductions and structural reforms.

Dirk Pollert from the VhU also emphasizes that new debts must be accompanied by savings and reforms. At the same time, the unions, represented by Michael Rudolph, assessed the reform of the debt brake positively, although here too a focus on investments in affordable housing, health care and education is called for.

The amendment to the Basic Law, which requires a two-thirds majority, introduces a new Article 143h, which is intended to regulate borrowing for the special fund. It is also planned that countries will be able to take on new debt of up to 0.35 percent of gross domestic product, which corresponds to around 15 billion euros. However, there are legal uncertainties regarding the constitutional changes and their effects on state law, which poses challenges for the federal states.

The entire situation shows that the developments surrounding the financial package are not only characterized by approval in the Bundestag and Bundesrat, but are also accompanied by numerous demands and concerns from various interest groups, such as: hessenschau.de and zdf.de report.