Ahead of a parliamentary debate on Friday concerning a €100 billion allocation to regional and local governments, representatives of the Green Party have voiced concerns regarding the efficacy of the funding. Andreas Audretsch, deputy parliamentary group leader for the Greens, stated in an interview with the “Rhinische Post” that the funds, drawn from a special €500 billion fund for infrastructure and climate protection, are unlikely to have a significant impact at the local level.
Audretsch argued that the government’s reduction of the value-added tax for the hospitality sector, coupled with increases to commuter allowances, is resulting in billions of euros in lost tax revenue. Simultaneously, he suggested that this lost revenue is being used to address budget deficits that were recently created, leading to increased debt. “Creating holes and patching them with debt is arguably the most absurd fiscal and budgetary policy imaginable” he said.
The Green Party believes that their prior support for the €500 billion special fund presented a significant opportunity for Germany. Audretsch cautioned that leaders from the Christian Democratic Union (CDU) and the Social Democratic Party (SPD) risk squandering this opportunity through the current allocation plan.
The parliamentary debate, scheduled for this Friday, will focus on a draft bill outlining the transfer of €100 billion from the special fund to regional and local governments for investment purposes.
