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Traffic light confident for 2024 budget - Important questions open

2023-11-29T14:40:07.271Z

Highlights: Traffic light confident for 2024 budget - Important questions open. German government is still aiming to adopt the budget for 2024 before the end of the year, if possible. Finance Minister Christian Lindner (FDP) has already prepared his colleagues for "considerable efforts" The leaders of the SPD, Greens and FDP wanted to meet with Chancellor Olaf Scholz (SPD) Will they determine what the federal government will spend less money on next year? Or do they at least hope to continue tackling the problems together?



Status: 29.11.2023, 15:29 PM

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Savings have to be made, but how? This is what the traffic light leaders are discussing. © Michael Kappeler/dpa

Chancellor Scholz has invited to the top meeting of the coalition because of the budget crisis. In advance, the traffic light dampens expectations. She is about to make an effort.

Berlin - Despite differing positions in the budget crisis, the German government is still aiming to adopt the budget for 2024 before the end of the year, if possible. "It would be nice if the goal would be to make it this year," said government spokesman Steffen Hebestreit in Berlin on Wednesday. There is a desire among all three coalition partners for an early conclusion. At the moment, the coalition is in the process of discussing the budget with the necessary speed, but also with the necessary care.

However, decisions must be made on core concerns of all three traffic light parties. Finance Minister Christian Lindner (FDP) has therefore already prepared his colleagues for "considerable efforts". On Wednesday evening, the leaders of the SPD, Greens and FDP wanted to meet with Chancellor Olaf Scholz (SPD). Will they determine what the federal government will spend less money on next year? Or do they at least hope to continue tackling the problems together?

SPD leader Lars Klingbeil does not yet expect a final solution for the 2024 budget. "The situation is too big for that," he said in the program "Frühstart" of RTL and n-tv. But he hopes that the first corridors of solution will emerge. CDU leader Friedrich Merz advised the federal government in an interview with Die Welt not to rush the budget for the coming year.

Formally, the coalition committee had been scheduled for some time, but the consequences of the Karlsruhe budget ruling are likely to be the focus. The Federal Constitutional Court had prohibited the retrospective use of billions of euros in Corona loans for climate protection and modernisation of the economy and the setting aside of emergency loans for later years. Now there is a gap of billions, and the coalition partners are divided on the consequences.

Problem 1: Intel billions, heating subsidies - what's going on in the Climate and Transformation Fund?

Since the ruling, the German government has been missing 60 billion euros, which had already been firmly planned for investments over the next four years. This was intended to finance, among other things, funding for chip factories of Intel and TSMC, for the replacement of old oil and gas heating systems, the renovation of the railway and many other projects.

Legally binding funds can flow in 2024 even without the 60 billion, because the fund has its own income and enough money. One thing is certain: there will be no cuts in heating subsidies for the time being. But what about the rest? The projects affect the "economic core of Germany," warns Economics Minister Robert Habeck (Greens). The Union is proposing to reverse the heating subsidy. Another possibility would be to generate more revenue through tax increases, but the FDP rigorously rejects this.

Problem 2: Billion-dollar hole in the 2024 budget

The ruling has also torn a billion-dollar hole in the 2024 budget. In total, the coalition will probably have to scrape together just under 20 billion euros. SPD Secretary-General Kevin Kühnert therefore considers it unavoidable to suspend the debt brake again. The coalition also intends to repair the 2023 budget - justified by the fact that the energy crisis was still clearly felt at the beginning of the year. Kühnert said on Deutschlandfunk that the hole in the budget could not be filled "by mere savings in the core budget and in the investment projects of the federal government". The previous austerity proposals would not do justice to the magnitude.

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Exceptions to the debt brake are possible in the event of natural disasters or exceptional emergency situations. This has been used in recent years, for example because of the Corona pandemic and the consequences of the Russian war of aggression against Ukraine.

The FDP currently sees no basis for a new emergency resolution. Scholz has announced that he will set priorities and "of course also limit spending". Among other things, the energy price brakes are to be abolished from the turn of the year, but further details are open. The Greens want to tackle what they see as climate-damaging subsidies, such as tax breaks for company cars. The CDU/CSU also has a list of cuts. On it: citizens' allowance, basic child support, social benefits. The SPD and the Greens reject this.

Problem 3: Fundamental decision on the debt brake

Immediately after the Karlsruhe ruling, a debate flared up about the future of the debt brake. Many politicians from the SPD and the Greens are calling for a reform so that the state can borrow more for important investments. Then future projects would no longer be on the brink. Economists also think this makes sense, and even individual CDU minister-presidents have shown themselves to be open. The FDP, however, has so far insisted on not touching the provision in the Basic Law. CDU leader Friedrich Merz sees it the same way.

Problem 4: Not much time before Christmas

There is not much time left for a budget decision before the end of this year - which would be normal. Government spokesman Hebestreit raised the possibility of a special session of the Bundestag before Christmas. But that would be ambitious. The Federal Council also only meets regularly on 15 December.

According to Hebestreit, the alternative would be a budget conclusion in the Bundestag, probably in mid-January. In this case, provisional financial management would apply until the end of January or the beginning of February. Then, for the time being, only expenses that are necessary to maintain administration and meet legal obligations will be possible. In practice, however, the Ministry of Finance can authorize the ministries to use a percentage of the funds of the draft budget that has not yet been adopted per month. Dpa

Source: merkur

All news articles on 2023-11-29

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