Can the social-ecological transformation succeed despite planned budget cuts? An interview with the economist Rudolf Hickel.

Can the social-ecological transformation succeed despite planned budget cuts? An interview with the economist Rudolf Hickel.

According to a report by taz.de, the economist Rudolf Hickel asks whether the social-ecological transformation can succeed despite planned budget cuts to the traffic light and expresses some doubts.

Mr Hickel raises concerns about the current economy and warns of the risk of slipping into recession. Monetary policy and restrictive financial policy are putting pressure on public and private investments, particularly in housing construction. The return to the debt brake, which slows down investment, as a result of the Federal Constitutional Court's ruling on the debt brake increases this burden.

Hickel sees massive cuts in urgent investments in ecological restructuring and doubts the planning security provided by the Climate and Transformation Fund. The planning uncertainty resulting from the judgment on the debt brake is also putting a strain on companies when it comes to their investments.

He also complains about the lack of approval for subsidies for ecological conversion, which are not sufficiently planned for in the budget. He warns of the likelihood of further tipping points due to insufficient budget resources for ecological transformation.

Hickel emphasizes that the abolition of the brakes on energy prices will have a short-term impact on the economy and delay necessary investments. He calls for fiscal bridges in the ecological restructuring, which, however, cannot be implemented due to the current debt brake. He believes a reform of the debt brake or the creation of a climate fund with a loan volume of 500 billion euros for the next 10 years is necessary.

Rudolf Hickel's assessment illustrates the serious impact of the planned budget cuts on the ecological transformation and the economy. There is a risk that important investments in climate-friendly restructuring will fall by the wayside, resulting in economic tipping points. An adjustment to the debt brake or the creation of additional financing options are necessary to secure the ecological transformation and the economy in the long term.