Bruno Hollnagel, December 8, 2020, Budget – Finance

German Bundestag, Plenarprotokoll 19/197, pp. 24819-24820.

Right honorable Herr President. Right honorable ladies and gentlemen.

The budget reflects a new normality, a normality which is terrifying. Euro crises, state debt crises, budget crises, bank crises, economic crises and a lockdown crisis all steer towards a collapse. The government’s solution: Planned economy, gigantic new indebtedness, expropriation of the taxpayer, liability mutualizations which veil rather than solve the problems, ladies and gentlemen.

Germany has long since over-stepped the point of no return. Germany’s sustainability gap amounts to 13.8 trillion euros. That is about 400 percent of the gross domestic product, that is uncovered obligations in the area of about 38 Federal budgets. That is not re-payable, that is irresponsible, that is the result of a failed policy, ladies and gentlemen.

We are meanwhile in an anarchic state. Treaties will not be observed: Not the Maastricht treaty, not the EU treaty, not the stability and growth pact which, among other things, prescribes a maximum indebtedness of 60 percent of the gross domestic product. And the Italians break the stability and growth pact, live beyond their means, go into debt immoderately, and demand on account of their debt Corona aid, and will still be rewarded with grants of money. Ladies and gentlemen, the EU gives presents to treaty breakers and Germany is liable for that. That is unbearable.

For the reconstruction funds, the EU wants to incur 750 billion euros of debt. That contradicts the ban on indebtedness according to Article 311 of the AEU-Vertrag [Treaty on the Functioning of the European Union]. Moreover: Aid within the EU is only permissible in regards national catastrophes in individual states. Such a circumstance is not the case. Consequently, Next Generation EU also violates the no-bailout clause in Article 122, AEUV. 390 billion euros of the 750 billion euros shall be granted. The Italian foreign minister would use means from the funds to reduce Italian debts. Since Germany is liable for the funds’ debts, the Italians receive a tax reduction on the backs of the German taxpayers.

            Sven-Christian Kindler (Greens): Yet that certainly is not right!

The Merkel government on one hand demands a sustainable budget and new taxes, on the other it makes grants of money and doubles the EU contribution. You turn the EU into a self-service store without cash registers and Germany is the principal supplier. That is intolerable. There must be an end to that!

Recently might one read that state and bank balances will only be able to be kept stable by central bank interventions and that the European banking system sits on bad credits to the sum of 1.4 trillion euros. The ESM does not nearly suffice for coverage. Ladies and gentlemen, if one domino falls, the chain of mutual liability will pull us all down with it. Any budget plan is then, without condition, scrap paper.

The liability union becomes expensive for us if we must share the debts of other states. And given that, Herr Minister Scholz, you wish to impose a wealth tax? Why do you not demand that of the wealthy French and Italians? The median assets of the Italians and the French are about three times greater than those of the Germans. Why actually shall we always be paying?

Stop the introduction of a transfer union by means of the “Corona Emergency Budget”. You have long since mis-played the future of our country. It is time for an alternative, and my idea is: The Alternative für Deutschland.

Thank you very much.

            Stephan Brandner (AfD): A good idea, Bruno!

 

[trans: tem]

 

 

Bruno Hollnagel, September 18, 2020, European Central Bank – Negative Interest

German Bundestag, September 18, 2020, Plenarprotokoll 19/177, pp. 22262-22263. 

Right honorable Herr President. Right honorable ladies and gentlemen.

So as to anticipate: It is not for me to question the independence of the ECB. It however, first, may not interfere in the rights of others and, second, must guarantee the proportionality of its means of action and thus keep an eye on the extensive effects of its doings.

In regards interference in the rights of others. In that the German Bundesbank, charged by the ECB, collects negative interest and ultimately pays over the earnings to the state, that practically works as a tax. For that reason, Professor Elicker, in his brief of February 2020, spoke in this relation of a “mechanism which in its effects is equivalent to a special tax”. That is the mechanism which is here being implemented. To parliament alone, however, is given the taxation authority. We ought not to hand over this right.

In regards proportionality. Professor Knops in his opinion of October 2019 wrote of the efficacy of negative interest - I cite: The ECB's measures violate the subsidiarity principle (Art. 5, para. 5, EU Treaty) and the fundamental of proportionality (Art. 5, para. 4, EU Treaty).

In evaluating the proportionality of the ECB’s measures, the following points are especially to be considered:

Zero and negative interest, regarded in economic terms, is absolutely absurd. No one with a healthy common sense would give money to anyone knowing that he is guaranteed to get back less.

It would be more sensible to keep the money under the pillow.

Negative interest has two effects on banks: First, it depresses the overall interest level. The danger thereby increases that the interest received by the banks no longer covers the risks. Second, negative interest robs banks of capital so that they are less in a position to take on risk.

That altogether endangers the financial stability of Germany. Ostensible solutions like associations of liability and synthetic bonds only disguise the situation, yet do not solve the problem.

            Lisa Paus (Greens): Complete rubbish! You should read Frau Schnabel for once!

We all know: Low interest leads to mis-allocations of capital [Kapitalfehllenkungen]. It produces bubbles which later burst and produce great economic damage – for example: Spain.

Too low interest misleads to the taking up of more credit than is healthy. In Germany at the end of 2019, there were on hand 330,000 so-called zombie firms; the Creditreform [debt collection agency] presently speaks of 550,000 zombie firms. That is a firm which, without new credit, is no longer in a position to survive. According to the Creditreform, their number, as a consequence of the lockdown effects, can still climb to 700,000 to 800,000. The sword of Damocles is poised over Germany’s financial sector.

Not only are savers negatively affected by low interest but naturally also insurance companies and pension funds and thus practically all citizens. Too low interest removes the interest rate pressure from the market with the result that, first, economic efficiency declines and, second, the purchase of firms is facilitated; that means: Business concentration.

Overall, it is established that negative interest by means of uneconomic resource allocation produces economic weakness.

Ladies and gentlemen, I am of the opinion: The ECB policy interferes immoderately in the rights of the parliament and that its policy is disproportionate. We must do something to oppose that; for example, in which we in common consider whether we do not reimburse the negative interest.

Thank you.

 

[trans: tem]