A Decision for Democracy
#317
My Dear Friend of Democracy,
Next Tuesday, 18 March 2025, the German Bundestag will vote on a legislative change of historic significance.
A brief background:
Friedrich Merz, who won the German election in February and is waiting to become the country's next chancellor, announced last week that his centre-right Christian Democratic Union (CDU) party, alongside the centre-left Social Democrats (SPD), had agreed to loosen the country's constitutionally enshrined debt brake to exempt defence spending above 1 per cent of the GDP. Merz and the SPD's new parliamentary leader, Lars Klingbeil, also announced a special 500 Euro-billion fund to finance spending on infrastructure over the next decade.
Any bill that involves amending Germany's constitution requires the agreement of a two-thirds majority in the Bundestag.
This is the reason why the current parliament is supposed to vote on the change in the law. There the CDU, the SPD and the Greens have a necessary two-thirds majority, which they will lose once the new parliament is put in place at the end of March.
So much for the background.
But why is the law so potentially far-reaching? Why, no matter what the decision, the consequences could be historic?
If a two-thirds majority is found, then there will be enough money for current and future economic recovery, as well as for financing a necessary and new security architecture, making it less likely that dictatorships like Putin's will start another war in Europe.
If a sufficient majority is not found, the chances of military action by dictatorships being successful will increase. It would also be more likely (due to lack of investment in infrastructure in Germany) that the mood in the country would continue to tilt towards the partially right-wing extremist party, the Alternative for Germany, or AfD for short, which will be the second strongest party in the next Bundestag.
The economic historian Florian Schui drew a comparison to the end of the Weimar Republic on the public broadcasting Deutschlandfunk (original interview file in German can be found here):
"Of course, an economic crisis passes, but it can ruin not only lives but entire societies, even democracies. The rise of the National Socialists (“Nationalsozialisten”) at the end of the Weimar Republic had many facets. Still, the rise on this scale can only be explained by a completely misguided economic policy. The last governments of the Weimar Republic had dogmatically stuck to the austerity policy. This was already en vogue in this country at the time."
The USA, on the other hand, Schui continued, had chosen a different path at the time, that of the "New Deal", the series of economic and social reforms that were implemented between 1933 and 1938 under US President Franklin Delano Roosevelt in response to the global economic crisis. The core of this was an expansive economic policy.
Schui again:
"I think we are at a moment in Germany where we need to intervene with a similar expansive economic policy. The abolition of the debt brake is urgently necessary for this."
Admittedly, the debt brake has one important advantage: It protects against populist politics, namely that politics takes the easy way out and finances the moon with tomorrow's money. At the expense of future generations. However, by prohibiting necessary action, the debt brake can also potentially destroy democracy. To the detriment of that future generation in particular.
That is why I hope that the necessary majority will be found in the Bundestag next week so that investments can be made in infrastructure and security.
Over and beyond, I hope that the next Bundestag will have the courage to tackle a more far-reaching reform that makes debt-financed investments possible in all areas.
See you in Germany,
Johannes Eber