East German economy in danger: Expert opinions on the budget ruling of the Federal Constitutional Court

East German economy in danger: Expert opinions on the budget ruling of the Federal Constitutional Court

According to a report by www.volksstimme.de, Germany is facing a challenge because there is a lack of 60 billion euros for the climate and transformation fund. This could have a particularly negative impact on the East German economy, as around 50 billion euros of the planned investments in German industry will be in East Germany.

The lack of funds could endanger prosperity and jobs in East Germany, according to Parliamentary State Secretary Michael Kellner. Without the climate and transformation fund, the establishment of chip factories in Dresden and Magdeburg and the reconstruction of the solar industry in eastern Germany would be at risk.

The FDP finance and budget expert Frank Schäffler, on the other hand, calls for the waiver of subsidies for chip factories in East Germany. He argues that these locations are not structurally weak areas and that the subsidies could disadvantage medium-sized companies.

DIW expert Claudia Kemfert, on the other hand, believes that suspending the debt brake due to a ruling by the Federal Constitutional Court is justified and recommends reviewing the expenditure of the climate and transformation fund and making future investments in areas such as electromobility, rail transport and digitalization.

This lack of funds could lead to a postponement of investments in East Germany and impair economic development there. There could also be a discussion about the distribution of subsidies and investments between structurally weak and prosperous regions. It is therefore important that politicians quickly find a solution for financing the climate and transformation fund in order to secure the planned investments and economic development in East Germany.