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German cabinet tries to solve ‘no-debt’ crisis after court outlaws budget

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Instead of travelling to Dubai, Economy and Climate minister Robert Habeck (L) is having to stay and sort out the budget crisis (pic BBC)

You know it’s a crisis when Germany’s Green vice chancellor cancels attending a climate summit.

Robert Habeck, who’s also economy minister, was supposed to be at the COP28 summit this week in Dubai. Instead, he is in Berlin, wrangling with coalition partners over an emergency agreement for next year’s budget. 

The crisis exploded on 15 November, when Germany’s constitutional court declared that the government’s budget was illegal for breaking German laws against taking on new debt.

That left a hole of tens of billions of euros.

Now the government has just a few days to come up with a solution, if it wants to pass the 2024 national budget before 1 January without emergency sittings.

On Wednesday (06) Germany’s cabinet meets for the last time this year. A revised budget would have to be put to parliament in next week’s final sessions before Christmas, so ministers should agree this week on how to balance next year’s budget, while sticking to the law.

This is not so much a debt crisis, as an anti-debt crisis. A German law, knowns as the “debt brake“, limits the amount of new borrowing the government is allowed to take on.

The law is enshrined in the constitution since Chancellor Angela Merkel introduced it in 2009 and is a matter of faith for conservatives, who brought the case to the courts.

So it was a coup for the conservative opposition when three weeks ago judges ruled that Olaf Scholz’s left-leaning government was breaking this law.

Balancing Germany’s budget is a feature of German politics, and is known as the schwarze Null, or black zero. It limits a government’s budget deficit to 0.35% of economic output.

Exceptions are allowed in national emergencies, such as the Covid pandemic. The government had planned to use emergency debt left over from the pandemic, to spend on Germany’s shift to green energy instead. Germany’s constitutional court has declared this wheeze illegal.

That leaves an estimated shortfall of €60bn (£51bn; $65bn) for 2023, and €17bn for 2024.

For the current year the government has decided to get round the “debt brake” by declaring 2023 an emergency year, because of the energy crisis sparked by Russia’s invasion of Ukraine, although this may also be challenged in the courts.

But so far, it’s not clear what Mr Scholz is proposing for 2024.

A much-anticipated parliamentary speech by the German chancellor last week did nothing to clarify that. His main message was: Trust me, we have a plan. He also repeated his mantra in German-accented English that “you’ll never walk alone”.

German Chancellor Olaf Scholz speaks during a visit at the BMW Group plant in Munich, Germany, December 5, 2023
The German chancellor is holding talks with his Green and liberal coalition partners (pic BBC)

Behind the scenes the three coalition parties have spent the last few days in late-night meetings scrambling to reach an agreement. German commentators can only guess at who is negotiating what, based on which government building has the lights on late at night.

Broadly speaking the only solutions are tax rises, spending cuts or more debt. But these are three very different parties, with conflicting views over borrowing and spending.

The business-friendly small-state liberal FDP, which runs the finance ministry and holds the purse strings, is ideologically opposed to higher taxes and obsessed with keeping the “debt brake”.

Chancellor Scholz’s centre-left SPD meanwhile refuses to roll back a promised increase on social spending, and the Greens are determined to boost investment in Germany’s transition to renewables.

An uncomfortable coalition at the best of times, and these are not the best of times.

Until now the cracks have been papered over by throwing money at causes important for each party.

But all three are doing badly in the polls and have been punished in recent regional elections, making party members unruly and party leaders less open to compromise. The main reason that a compromise looks possible is that poor poll numbers mean there’s no appetite within the government for fresh elections.

Green ambitions to soften the “debt brake” will be difficult to agree in parliament because this needs a two-thirds majority.

Opposition conservatives smell blood, so are in no mood to compromise, and even liberal coalition partners may not agree. But Robert Habeck is rumoured to be planning to get round borrowing rules by arguing for an exemption for crucial future infrastructure.

Either way, the coalition may still find a way to spend money on what’s important to each party, just less of it.

(BBC)



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At least 139 dead, 84 missing as migrant boat capsizes off Djibouti

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A member of the International Organization for Migration inspects the abandoned wreckage of a boat that capsized off the coast of Djibouti on April 12, 2026 [Aljazeera]

At least 139 people, including 15 children, have died and 84 are missing after a boat capsized off the coast of Djibouti, according to the United Nations migration agency.

In a statement on Sunday, the International Organization for Migration (IOM) quoted survivors as saying that the incident happened near Guhere off Djibouti’s eastern coast in the Gulf of Aden near the Bab al-Mandeb strait from Thursday night to before dawn on Friday.

The boat was heading from Djibouti to Yemen with more than 300 people on board. More than 80 people – all Ethiopians – survived the shipwreck while Djiboutian search and rescue operations continued.

“Our teams are on the ground alongside local authorities to provide emergency assistance,” IOM Chief of Mission in Djibouti Alexandre Coissac said, lamenting the “devastating loss of life”.

That number only includes those buried by authorities in Djibouti. Others have been buried by the migrants themselves but they won’t be added to the official count until authorities can verify the bodies, Alexandre Coissac, IOM Chief of Mission in Djibouti, told the Associated Press.

“This tragedy is a stark reminder of the dangers faced by migrants along this migration corridor as they seek economic opportunities,” Coissac added.

[Aljazeera]

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‘Time for Ukraine to get new president,’ says Trump after Zelensky condemns diesel deal

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[file pic]

US President Donald Trump has said he thinks “it’s time for Ukraine to get a new president” as he responded to Volodymyr Zelensky’s criticism of the US diesel deal with Russia.

The Ukrainian president warned a new deal to release millions of tonnes of Russian diesel into the US would provide Moscow with money to continue its war against his nation, calling it a gift to Russian President Vladimir Putin.

Trump told reporters outside the White House on Saturday that Zelensky “wants to make problems for the world” by continuing to authorise attacks on Russian refineries.

“He’d better damn well stop,” Trump said, before suggesting Ukraine should “get a new leader who can make a deal”.

Global fuel supplies, including diesel, have been severely limited by the war against Iran launched by the US and Israel, which led to the effective closure of the Strait of Hormuz, through which roughly a fifth of the world’s oil products usually flows.

Russia – a major producer – and Ukraine have recently intensified their strikes on each other’s energy infrastructure and transport facilities, further straining energy markets.

“We said, ‘you can do whatever you want to Russia, don’t hit the refineries’, because that’s a world problem that’s caused,” Trump continued.

“He could have made many deals and for some reason, he never does.”

Putin’s envoy Kirill Dmitriev described Trump’s intervention as “iconic and historic”, saying that Ukraine “needs leadership actually focused on peace”.

The US president confirmed on Friday that an agreement had been reached with Moscow to suspend sanctions on Russian diesel exports until 7 April.

Zelensky reacted by saying it would allow Moscow to raise new funds to source new military equipment to continue the war.

He also accused Moscow of taking the deal “to mean they can keep fighting, to mean they keep dropping bombs on cities” following deadly new strikes on Zaporizhzhia.

The Ukrainian president spoke to several allies on Saturday to discuss the latest developments, calling for “real decisions to protect lives in Ukraine” and to protect European security.

A Downing Street spokesperson said UK Prime Minister Andy Burnham had spoken to Zelensky and offered his “complete solidarity”.

The pair had agreed Russia should acquiesce to “an immediate energy ceasefire” and end its attacks on shipping in the Black Sea, the spokesperson said, as “this would immediately release more energy and food supplies into the global market”.

News of the US-Russia diesel deal was also met with criticism by EU’s foreign affairs chief Kaja Kallas, who echoed Zelensky in saying that suspending sanctions “provides Moscow with more revenues to wage war”, adding: “This is not the time to ease pressure on Russia, and Europe won’t.”

She said European foreign ministers intended to approve the biggest set of sanctions on Russia since the start of its full-scale invasion on Monday.

The deal with Russia is the latest effort from Trump to lower fuel prices in the US ahead of the midterm elections, after months spent grappling with the political consequences of the Iran war.

That conflict, which began in February, has sent the cost of petrol and in particular diesel skyrocketing, which has soured his standing with the American public who have been stung by the higher pump prices and knock-on effects that led to across-the-board inflation.

The average price of diesel is currently $6.28 (£4.74) a gallon, according to the AAA – up from last month’s $5.94 average, and $3.68 last year.

Under the deal, Russia would release an initial 300,000 tonnes of diesel “to the American and global marketplace” followed by an additional 500,000 tonnes in November.

A further million would follow, Trump wrote on Truth Social, and then another 3m tonnes “within a short period of time” – but he noted that this delivery will be “based on the condition of their diesel refineries”.

In the past 10 months, Russia experienced two waves of severe fuel shortages across the country due to Ukrainian drones strikes on its oil refineries.

Diesel production in Russia dropped by an estimated 30%, according to the International Energy Agency.

Trump had already called for new elections in Ukraine last December, saying Ukrainian voters should have the choice to replace Zelensky.

Since the war broke out in 2022 Ukraine has been under martial law, meaning elections are suspended.

[BBC]

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Pope says death penalty ‘inadmissible’ as US plans to livestream execution

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[file pic] Pope Leo XIV attends a weekly general audience at St Peter's basilica in The Vatican [Aljazeera]

Pope Leo XIV has declared that the death penalty is “inadmissible” while his home country, the United States, announces plans to livestream an execution by firing squad.

Marking World Day Against the Death Penalty on Saturday, the pope reiterated the Catholic Church’s teaching on capital punishment, writing on X that it was “inadmissible because it is an attack on the inviolability and dignity of the person”.

“The common good can be safeguarded and the requirements of justice can be met without recourse to capital punishment,” his post said.

“Effective systems of detention have been developed that protect citizens while at the same time do not completely deprive those who are guilty of the possibility of redemption,” added the leader of the Catholic Church.

The American Pope’s comments come days after US Secretary of Defense Pete Hegseth said on Thursday that the firing squad execution of Nidal Malik Hasan on December 3 will be livestreamed.

Hasan was convicted of killing 13 people and wounding 32 others in a shooting at the Fort Hood military base in 2009.

Pope Leo did not specifically refer to the planned execution, or last month’s botched execution attempt on Christa Pike,  who survived two doses of the lethal injection in Tennessee.

But his post came hours after his top deputy, Cardinal Pietro Parolin, the Vatican secretary of state, told Vatican News that the plan to livestream Hasan’s execution was “unacceptable”.

It was Leo’s predecessor, Pope Francis, in 2018 who first amended official Catholic teaching to declare capital punishment “inadmissible” in all circumstances.

[Aljazeera]

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