Hamburg changes debt brake: A dangerous course towards debt!

Hamburg changes debt brake: A dangerous course towards debt!

The political wave is making waves in Hamburg: the Hamburg parliament approved a change to the debt brake in the first reading. This set an annual structural scope for new debt of up to 0.35 percent of the German gross domestic product (GDP). This happened on Wednesday with 104 yes votes and only 10 no votes. The majority of MPs, including the red-green coalition, the CDU and the Left, supported this landmark decision, while the AfD clearly opposed it. However, the necessary two-thirds majority was achieved, reported taxpayer.de.

But what does that mean for Hamburg’s coffers? Critics such as the Hamburg Taxpayers Association warn against this irresponsible decision. They see it as a dangerous system change that will result in permanent debt. The association is convinced that the problem lies not in insufficient income, but rather in exorbitant expenses. A look at some cost-intensive projects such as the “Haus der Bürgerschaft”, whose rental costs over 30 years are estimated at 202 million euros, makes this clear. The exorbitant additional costs of the “Vera II” sewage sludge project of over 100 million euros are also a clear sign of the unfortunate situation in which the city finds itself. Furthermore, the Billwerder youth detention center became 20 million euros more expensive, and the Schwanen Quarter in Eppendorf doubled its costs from 3.6 million euros to 7 million euros.

The financial situation and its consequences

These developments raise questions: How does Hamburg handle its finances? The sewage sludge project, the Hamburg energy networks, which cost 4.3 million euros instead of the original 2.6 million euros, and the construction of the German Harbor Museum, whose costs are estimated at half a billion euros, are just a few examples of cost calculations that have gotten out of hand. In an additional motion, Parliament decided to use the new financial leeway specifically for investments in research, education and technology transfer - a decision that was supported by 91 MPs but viewed critically by 23.

The discussion about the debt brake is not only driven by concerns about the city's budget, but also by the ongoing shortfall in revenue, which is reinforced by the federal government's investment booster. Supporters of easing the debt brake argue that this would create necessary financial freedom for infrastructure projects and social demands. Critics, on the other hand, warn of the dangers of uncontrolled growth in spending, the loss of budget discipline and the associated consequences for future generations verbandsbuero.de reported.

The way forward

At its core, it's about a fundamental question: How does Hamburg want to do business in the future? The existing challenges to the debt brake and the associated financial structure must be overcome. Loud bpb.de The debt brake was introduced to prevent excessive new borrowing and has clear guidelines that allow the state to take on more debt in difficult economic times. The social, economic and political connections are complex, and the outcome of this debate will have far-reaching consequences for Hamburg as a business location and for public finances.

With the second reading of the constitutional amendment set for July 16, it remains to be seen how senators and citizens will respond to these far-reaching changes. One thing is certain: an important decision is about to take place in Hamburg.