or at the same time that keeps rising? don no, but this is tara t leads to higher unemployment and slows down the economy was a card, you've reached the 300 trillion that that trump stuff. december 9, dw, the germany is facing the budget crisis. following on emergency spending phase, europe's biggest, under was towed largest economy is in trouble. it seems to have run out of money that if need for modernizing its infrastructure at ports, even gifts, climate dogs, germany likes to be the same as the global plan, mccaden. it has plans to becomes carbon neutral in the next couple of seconds. a plan that now looks phosphates. why other countries like for us and china

investing heavily in the infrastructure for a better future? germany on the other hand, is having to save money on capital costs. so today on to the point we are discussing problems made in germany, no more money for the future, the hello and welcome to to the point i am each i pod, yes on here in button. and before we take deeper, let me quickly introduce my guess to be have my 2 cabinets. next he is political is chief europe correspondence. next on the bottom, it is on a desk who is the bottle with bloomberg and dw as political correspondent, ne phone. how much time over anyone, welcome to you all. let's start with the basic, let's see what has happened. so all that being days of 60000000000 euros that would

therefore go with fund the unused and the government decides to transfer them to climate and transform ation fund. and then the highest quote said that is illegal that is unconstitutional. matthew, what kind of impact is this rooted in going to have? no. it's having a devastating impact because the german government no longer has the money that it needs to fund the climate projects that they were planning in order to reach the goals that you. you've outlined and there is no easy way for them to find this money in the budget. now, because germany has a deficit limit they've put in what they call a debt break, which means that the government can't spend more really than what it, what it brings in. and so it's, it's really not clear at the moment how the government is going to resolve this because you're not going to be able to find 60000000000 very easily. maybe we can talk about the dead break and look like a later unit. jeremy has said really big targets for itself now by 2045. it wants

to be carbon, huge. but there are projections now that show that germany might not even be able to achieve targets for 2020, which is a to generate 80 percent of electricity from renewables. so is that apply and be that's a very good question. and i, i feel like at the moment um, there isn't really a plan b and when we, when we look at the government, i mean next to sort of what's happening on the ground. there's also a political crisis happening in the governing coalition. they am these 3 parties that are together and equation have very different ideas about how germany is going to achieve that transition in the next couple of years with what instrument and policy instruments and physical instruments and, and there's a lot of insights. again, we can see the polls show that the part is that a winning from that in fighting in the, in the government are the parties, the conservatives to the uses you and the far right a d. so the,

and it's really under pressure to come up with has to be and to communicate effectively to his population. there is a lot of pressure. now germany over 5 is the 3rd largest economy in the world. but at the same time, jeremy is also the country that there's only 2 percent of the global carbon emissions that interests us. and so show me really be bothered or should germany privatized economy over time. right now, i think you cannot really do this contradiction or it's not the contradiction, of course, because a promise has always been that the screen transformation also yields green grove. so that in an ideal world, which we may be in a don't live in, we know, realize the, the, the green transformation, what has been and you cannot make miracle that was actually, i think, or the frogs even set that. and now we realize maybe that's not really working or

it's not working out. so let's have a quick recap or for does happen. on the 15th of november, dominique stop called the government's budget unconstitutional. it had moved left over magenta. the funds from the co would find a mix to a fund to counter climate change, and to modernize the country. this decision has left a whole of 60000000000 euros and the government's budget. and it does also push also score elation that comprises off the social democrats. that's s b d dreams. and the liberal ftp to germany needs money. the ministry of finance has budget is 60000000000 euros short and it needs that money for climate fund to oversee the economic and industrial transition to green energy. the government was quote, off god, now it stumped. but almost 2 weeks after the judge's ruling transfer of schultz is now spreading his message of optimism around the buddhist. talk to him as and yet

we must now invest heavily in modernizing germany. we must now ensure that we manage the consummation of our economy in germany. and remain competitive as a strong industrialized country. the web page live in the year to come around. 19000000000 euros should be spent on improving heat installation. in buildings. billions must also be invested to support the industry itself. so that still companies don't need to depend on fossil fuels, as well as toward establishing micro chip factories and assisting the automotive industry. we'll gemini succeed, and if not, will the country be threatened by industrial decline? my to, how do you see that? i think germany is already threatened by industrial decline to be honest. and i think we've been seeing this over the past several years. you're seeing a kind of the industrialization happening in germany because energy prices have already been quite high here in comparison to the other parts of the world in particular north america. so what you've seen is a lot of big german companies,

as such as the chemical maker b s f, which many viewers might be familiar with, had been investing more in asia in north america, then they have in, in europe and in germany in particular. but it's not just those companies, it's also the automakers. it's, it's, it's uh for its value. it's dimer bmw, etc. they're still producing in germany. but when they think about where they're going to expand around the world, they're not thinking about europe. they're looking elsewhere. partly because, and energy prices here are so high. you've given some concrete examples. now, talking specifically about this money back was the budget was also allocated for a modernizing in a way that they will send me enough to factories. it was also there in ways a battery factories. so what is going to happen to all of these projects? now? i think these projects are not going to happen because of the, the legal constrains around at the court has said you cannot use this money. that means that the 60000000000 is not available at the same time. they have this

deficit limit these, these debt controls, which means that they can't go outside of the normal budget. because the way to think about it was that they were, they were 2 pots. there was the normal budget, in which there's 460000000000 euros that the german government has to spend. and then there was this extra budget of 60000000000, but of the 460000000000. the german government only has 10 percent of that that it can use freely. and that's why the 60000000000 was going to be so important without that money. and with the legal constraint is going to be impossible to do so because the 3 parties in this coalition can't agree on a solution that would be solutions. but those potential solutions are not acceptable to it. at least one of the parties in, in, in the coalition. so it's very difficult to see how they're going to get out of. so i think it's more likely they're just going to limp along for the next couple of years until there's a new election until it as a new election. now, the opposition has already say, but there should be new elections and as soon as possible, do you think that's going to happen? and if us with that change, anything,

i don't think that's going to happen because none of those 3 parties in government at the moment have any interest and in calling step elections because they would lose. basically i'm, and i think, you know, all representatives of, of all 3 parties have come on and say that they, they still at the moment still want to work together. and i think and within the parties, there's a lot of pressure also on the party leadership. and so the, the, the parties bases, especially with, with, with free democrats, is putting a lot of pressure on the leadership and, and saying maybe we shouldn't be in this core lesson. but in the polls we see that it would be very difficult for the f t p to really cross the 5 percent threshold if they were to have new elections, especially elections. i do think it is important to talk about the options that are on the table and it seems politically impossible there that needs to be political ability to follow these options through. but there are ideas, suggestions, and on the table to to find that money. one example would be what many of suggesting is to 2 cuts, subsidies for climate damaging and so kind of damaging subsidies and, and to,

to take that money and for, for the fund and other and other ideas that has been put forward. but some economist has been to create sort of a special funds similar to what germany created for the bonus via it's military and the 100000000000 to created for the climate. and they are to, i think it is interesting that, that germany's top court kind of has also given an argument in favor of creating such a fund. when to use it in 2021, 2 years ago. and in the store it go ruling and basically said the german government is not doing enough to protect future generations wellbeing and to do something about about the climate. it's not um, yeah, it should do more. so there's in other top chords ruling that basically could be used as a, as a foundation to argue for, for such a fund. but obviously if difficult to achieve that with the political parties and understands on that as it stands right now. and also what has happened today is that a bowden court has ordered germany to set up a climate action plan to ensure the country got scrub and emissions in the traffic

and construction sector. you only to his smiley. what's happening, those one quotes and you have to save money, or you can choose the money, the other quotes, and you want to spend more. how is the good thing going to make sense of all of that? yeah, it seems a bit right now that the concepts become like the, the, the enemies also, if this government seems so, i think what the court has decided today, it's in a way, almost common sense. we have to do something about climate change of process going has to do something. and i think originally this government has also was also willing to do that. but now of course, 1st of all, i think they have lost the people's support for this, the, the fight against climate change or something, just not the popular fight anymore. and secondly, we have to financial problems. so, and we have all these tensions within this government. so i think the chances that

the government both will fill this costs are relatively small right now or and in parliament, charles claim that no matter what investment will continue, although he did not really specifically say anything, how he's going to do that. what do you make of it? what is his plan going to be like? that's a very good question. i think what's, what actually is wants to project as sort of this security stability. i mean that is his communication style but and, but they don't really have applied yet, and i don't think we'll see one and until next year, early next year. and so, yeah, i mean that, that is, that is really kind of like on a, well actually it's an action. and because i think, as you said, he also realizes that in the population, the mood in the population is shifting as shifting away from that's, you know, from trust and the government, people are losing trust and the government's doing and in their ability to handle this. and to handle this, so i think, yeah, it's more of a,

it's more for communication traits than actually a plan. but it's not walking. so it's not really working. i think they really have to come up with a plan in order for it to work. when would you say that there's a crisis fatigue with the population? if you say that it's not working with the, with the people? i think so, i think what we've seen this year with is controversial heating law. and that's who would have actor muse, economy and kind of minister suggested and where there were a lot of details, unclear him and. and you could really see how the debate was sort of polarizing. and i think it's interesting that in polls when people are asked a lot of them theoretic, they injure me, still support it during this transition, an energy transition. but then and, but they don't support the green example and they, they don't really support their government's handling of it. so i think germans really want to have a plan. they want to have a plan that makes sense and that is clearly communicated. and i think it is, it is a very challenging transformation that's also challenging to communicate that. but i think climate goods, good policies has to communicate sort of has to bridge the gap between,

between the theoretical approval of kind of friendly policies and then the actual willingness to also change something about their own consumption and, and their lives. i mean, this is really going to affect how people heat their homes, how they move in the yard their lives. you say that's a shaw says way of communication, but in his way of communication, what i found interesting was when he talked of the new reality. now he said that had we known about this reality, our decisions would have been different to us by when we came about. he's talking about his own constitution and laws that exist. there is nothing boddeson for government to say about for 2 years. they haven't understood what the laws are like . so i think it's more than embarrassing, which is why i don't think it really is a communication problem. this is the way they've tried to justify it and all of the problems they've had saying, oh we, we, we just, they're not communicating it. i think the problem is, is that they have a plan that is proved to be unworkable. and you can, you know,

argue about what is actually necessary in terms of climate policy. i think there's a consensus in this country that they need to meet the international targets that they have agreed to. but the question is, how do you get there? and how do you get there quickly and so far? success of durham, governments have proved to be incompetent in that regard. and i think what a surprise many people about this latest episode is that the government knew this court case was going to be argued in front of the constitutional court. they knew there was a risk that the court would rule against them and they went ahead without a plan b. they continued to count on the 60000000000, which was really the foundation of this coalition. without that 60000000000 this coalition would have never come to be. and they went ahead anyway, and schultz, who has the reputation of being a no at all. i thought that he knew better then people who were warning him against it and, and he went forward and, and the greens went forward to willingly because they have their sort of climate

goals in, in, in, in, in their focus which is understandable. but they ignored all of the voices around them, saying this might not work. and you need to have a fallback plan. there is no fallback plan and this is why they are facing this, this crisis now. now you mentioned the debt to pay god. yeah, that's something that's very peculiar to germany. none of the g 7 countries have that kind of limit. so should that be the funds? would that help the government as well? i think that would be up to the germans to decide. but the, the reality is that they introduced the debt break in 2009. that was during the financial crisis, then were germany had spent tens of billions of dollars to prop up its banks. and there was a sense in the country than that. they needed to keep the government from over spending. and so they anchored this debt break in the constitution with the agreement of the main parties of the social democrats and the christian democrats.

at the time. so shots, his party agreed to it to buy a wide margin of the world has changed in those intervening years. germany did very well economically. the most people i think here forgot about the debt break because the economy was firing on all cylinders. they were recording one, sir, plus after another in 2018 alone, they had a surplus of something like $58000000000.00 euro so they didn't have to worry about this. but once cove it hit, then things looked a bit different and the government had to come in with this extraordinary support. and now the, the economy is still stagnating. they don't have the surplus anymore. but the, the iron, the of this whole thing is that germany doesn't have financial problems. i mean, that's not the way to look at it. it has one of the best fiscal positions of any country in europe. they can afford to spend. germany has the highest possible credit rating that a country can have. it, so it would have no difficulty going out and borrowing 5 times 10 times the

$60000000000.00 that it needs now without damaging its its credit rating. but it is really, it's more of this kind of psychological barrier, the germans have this obsession with depth. the sense that that is something you're evil that has brought them to this point. then it could prove to be there on doing if they don't decide to release the step break. ok. so we've been talking a lot about funds and money, but what you also need to modernize their country is workforce and data. so is that germany is going to face or is facing a lot of shortage. there's a decent study by a bunch of money that sees that by 2030. that would be 300000, less skilled workers. so how strongly planning on achieving gets targets and especially engineer of, of when day is going to be such a big shortage. yeah, i am one of the few good things this falls government has done is actually every

form of the workforce, immigration rule, which may will make it easier for people to find work here. the problem is that, that not to many people who right know a willing to come to germany because they have more attractive places in the world . but you can also fund for. what do we have dealing though is, is a big refugee wave we do. and, and of course people find out, oh yeah, but the people of the migrants were coming here cannot really do these jobs because in the really skilled labor. and we have a also this moral discourse in germany, you have to help people. but you're not really allowed to choose who's coming into your country. other countries do it a bit differently, maybe also some, most monthly. we don't and therefore we, you know, have a few, many migrants coming here which but true bones really solve our workforce problem.

to be also having this discussion at the time of golf 20, i to say less than the way. now if dominique is lost, its credibility, if i'm gonna call it that, or if i may call it a blunder after this, really germany be able to convince other countries to raise the climate targets. clearly, that's a very good question. i certainly is going to try to do so, and i think it is interesting to observe how germany is acting on an on the international level and then, and what the discussion is there and what role kind of it has there. and then on an internal domestic level, and i think team germany as they call themselves because there's a huge delegation going to come up and once to really enter into energy partnerships. it is kind of emphasized that it wants to show solidarity, especially with countries in the global south and help them with their energy transition. and, but yeah, i mean, the accredited credibility problem is not really new because when it enters into, into discussions with countries like india and, and says, well,

maybe uses phase or coal. and then obviously the answer is you're still burning coal. and that has been a problem in german who's still reliant on, on fossil fuels themselves. so the credit for the problem is not only new after this budget crisis, it's existed for one. right? so jeremy clearly is in a fix, while other countries and especially the us and china, are making big leaps. they have understood that the future lives and moving away from fossil fuels, the so in other modernize the infrastructure, the better it is for the economies. and i'm like germany, the on the waiting for any tables to done, they're busy taking action. now us, they may walk side by side, but they still stand a pond on many issues. china is presidency and us precedent by didn't had a meeting in mid november, regardless of the differences they do have one thing in common. both want to move away from fossil fuels and restructure their economies. to achieve this,

that's spending hundreds of billions and tax has money and subsidies both in the home countries and abroad. we have to keep going above all and shows us a climate action offers an opportunity for the nation to come together and do some really big thing. china is funding it, supports aquatic economy in large part with tax payers money, which is being used to boost the soda and automotive industries. as in the us, the president is spending $738000000000.00 to reorganize the economy. can the german government still keep up for has the federal republic already be left behind on? well, stephanie said with a, with a really interesting picture or image. a economy minister, havoc recently painted the ways of, you know, we are like this best break,

makes germany like like a, like a bucks or what and does a boxing ring with his hands tied behind his back. you know, while the others, him in china and to us for example, put like hospital was into the boxing shoes and boxing gloves. and i think it's actually very true. i mean, right now we of our standing in our own way a bit with these court rulings, i know, but also with what laws which 1st of all the government has created and which doesn't enabled us to actually invest money, invest money into these future technologies and markets and the as, as a mets, you said, i mean, it is germany could easily get money on the, on the, on the, on the markets. i don't know, but we can then not allowed moving from germany, b,

u. s. and china. and when she didn't things and bite and metro recently, they both lived a lot of emphasis on how they wanted golf twin dear to be a success. and nobody is not even going to do. but what kind of message do a ping that sends across? well, i think it sends the message that the united states is not particularly focused on what the u. n. is doing. it's looking at what it, what it's doing itself. this has been kind of a tradition in the us where these international agreements have not been as important in the american context as they have been internationally. but i think if you look at the numbers in the us admissions are coming down, there are these huge subsidy programs now that are going to drive the green transition. but um, i guess the determination was that uh, you know, the more important things for him to focus on at home then going to define at least you save the, the air fuel that a and the see the common footprint footprints by not going nothing can i guess maybe find about that i, i think what is interesting about the us example in the i r a is how,

how the us managed to internally frame the trans energy transition. really as sort of as big projects where there's a creation of, of work. but of work and you know, it's a, it's a good thing for and for the industries in those areas to really invest money there . which is unusual for us, for us government to do that. and, and i think germany, in many ways can learn from that to get the communication right. to get the framing right. the cost cutting or for the investment. what's the need of our for germany? i'd say the need is for the government to find a plan. and to find that money to, to make the investments that are necessary in order to meet on religion only be able to achieve the 2045 target of being neutral. i think so. not with the numbers. no. and the mattress take no, you're not very hopeful. about that, so that's on the bag. we have really the gentleman go, lynch managed to campus dogs. when it'd be able to modernize it's impressive to

what do you think about it. if you're watching us on youtube to let us know your thoughts. thanks for watching. the

account is been poisoned and the government is doing nothing to submit it if i was once the pride of savvy. but now in chinese ownership, it's become a dreadful pollution. kanza is on the rise. environmental activism sufficing back and demanding action. so it is a

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the . this is dw news line from berlin. the is rarely armies is a further hosted release is under way to his riley to the insurance. it is real with more about to me, free by home, off the release of the 2 women reasons, hopes of a further extension of the ceasefire. and just hours before the release of 3 is riley's, were killed a shooting. you were bus stuff in jerusalem. a moss as claimed responsibility plus the top 20 a climate talk to open and one of the world's biggest oil producing nations as

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