Hamburg dares to restart: debt brake relaxes investments!

Hamburg dares to restart: debt brake relaxes investments!

A significant step towards easing the debt brake took place in Hamburg on Wednesday. The Hamburg citizenship voted in the first reading for a constitutional amendment that will enable the federal state to expand its annual structural scope for new debt to up to 0.35 percent of German GDP. This proposal was supported by 104 votes, while only 10 MPs voted against it. The approval came not only from the red-green coalition, but also from the CDU and the Left. Only the AfD rejected the decision. With this decision, the necessary two-thirds majority was achieved for the constitutional amendment, which will be voted on again in a second reading on July 16, as NDR reports.

The planned changes will enable Hamburg to make targeted use of the existing financial scope for investments. Finance Senator Andreas Dressel (SPD) was pleased with the consensus reached and emphasized that the new opportunities would make up to 400 million euros available per year for investments in research, education and technology transfer. In addition, there will be 220 million euros annually over a period of twelve years, which will be made available from a 100 billion euro special fund. Dressel wants to ensure that these funds are used wisely.

A common goal

The agreement on easing the debt brake is no coincidence. This measure became necessary after the German Bundestag decided to change the Basic Law at the end of March. This change enables the federal states to undertake annual structural borrowing regardless of the overall economic situation, which is of great importance for Hamburg. The mayor of Hamburg, together with the CDU, SPD and Green factions, made it clear that the investments should not be used for short-term, consumptive measures, but rather should shape the future of the city, reports the CDU Hamburg.

“With the necessary clarity in the rules, we will also ensure Hamburg’s financial ability to act,” said Thilo Kleibauer (CDU). Milan Pein (SPD) added that the expansion of the infrastructure would be of crucial importance in the coming years. In this context, Green Dennis Paustian-Döscher emphasized the importance of placing climate protection and education at the center of investments. “We have to find a balance between necessary investments and financial responsibility,” said Paustian-Döscher.

A look into the future

The discussion about the debt brake has caused many waves in the political landscape. Critics like to see them as a brake on investment at a time when massive investments in public infrastructure are necessary. Scientists like Prof. Dr. Salvatore Barbaro point out that the debt brake has also had questionable effects in the context of recent years. The introduction did not lead to a noticeable increase in investment compared to the European average. In addition, a certain skepticism arose regarding the positive effects of these restrictions on the public sector, as in Government Research Report is presented.

With the upcoming reform, Hamburg now has the opportunity to set the course for a future-oriented financial strategy. If the decision is confirmed in the second reading on July 16, it will be a milestone for the city and its financial power in the coming years. Citizens can hope that this step will not only provide opportunities for debt, but also a new impetus for necessary investments and innovations in the Hanseatic city.