MNI BRIEF: Extra German Defence Fund May Mean Budget Trade-Off

Conservatives’ plans to make repayable EUR 100 billion in special funding designed to boost Germany’s defences, support Ukrainian refugees and speed up the transition to green energy following Russia’s invasion of the country would mean spending cuts elsewhere, the chief economic adviser to finance minister Christian Lindner warned Wednesday.

“If the special fund is provided with a repayment obligation -- and the CDU/CSU are pushing for this -- budgetary leeway will be restricted in the future,” former GCEE chair Lars Feld tweeted. “In addition, there are supplementary households and financing for refugees from the Ukraine. This creates trade-offs. If you want to prioritize state investments and promote climate protection, you cannot avoid social spending in view of this trade-off in the federal budget.”