Die Welt1 hour agoPolitics1 min readGermany

“Suddenly the finance minister seems to find money in his budget”

Federal Construction Minister Verena Hubertz wants to boost housing construction through a new company, but the project is causing tensions in the coalition.

Quick Look

The SPD is planning to found a federally owned housing association with one billion euros in start-up capital.
While Federal Construction Minister Verena Hubertz is pushing the project forward, the financing has met with clear criticism from the Union.

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Why It Matters

The SPD and the Union are arguing about the prioritization of budget funds for housing construction versus tax cuts.

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The leaders of the SPD and the Union are currently negotiating intensively about providing at least one billion euros for the establishment of a federally owned housing association. Federal Finance Minister Lars Klingbeil (SPD) seems determined to fully finance the project - even if he irritates his coalition partner from the Union, according to “Spiegel” information.

Federal Construction Minister Verena Hubertz (SPD) is planning a company in which the federal government would hold 51 percent of the shares. The remaining 49 percent should lie with external parties. The federal government should therefore not build itself, but award contracts to these partners: These can be companies from the private sector or municipal and state-owned housing associations.

The federal government would therefore guarantee the construction projects with its high credit rating and thus reduce interest costs. Rolf Buch, former boss of the housing giant Vonovia, is advising the Ministry of Construction on the project. He confirmed to “Spiegel” that he was available to exchange content, but that he would not receive any money for it.

The Social Democrats' move is causing unrest among the CDU and CSU. There are also projects there that are to be implemented in the coming year, including equalization of purchasing power in income tax or the almost complete abolition of electricity tax for private customers.

These are projects that would cost the federal government a total of almost eight billion euros. Finance Minister Lars Klingbeil (SPD) only wants to implement them if suggestions are made to him about how they should be financed. That's why Union politicians are astonished that there is room in the budget for the housing association: "Suddenly the finance minister seems to find money in his budget. Quite by chance for a project by an SPD ministry," a Union finance politician told the magazine. When asked by “Spiegel”, the Ministry of Construction did not want to comment on the plans.

Open Questions

Will the project be implemented despite the Union's resistance?
What exactly does the investment structure of the 49 percent external partners look like?