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Traffic light coalition struggles to find solutions to budget crisis

2023-12-02T13:59:44.321Z

Highlights: Traffic light coalition struggles to find solutions to budget crisis. Decisions on this could be made in the coming days. Federal Finance Minister Christian Lindner (FDP) specified the areas in which he considers savings to be possible. The SPD opposed cuts in the social sector. The pressure is on: the coalition must reach an agreement within the next few days if it wants to pass the budget for 2024 before the end of this year. The Greens have spoken out in favour of reducing climate-damaging subsidies.



Status: 02.12.2023, 14:39 PM

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Bundestag debate on the 2024 budget. © Michael Kappeler/dpa

The coalition is heading for decisive negotiations in the budget crisis. The Minister of Finance is driving in stakes where savings are to be made. The SPD opposes this.

Berlin - The traffic light coalition is struggling to find solutions on how to plug billions of holes in the federal budget for the coming year after the budget ruling. Decisions on this could be made in the coming days. Federal Finance Minister Christian Lindner (FDP) specified the areas in which he considers savings to be possible. The SPD opposed cuts in the social sector.

Why you need to save money

The Federal Constitutional Court had declared the reallocation of 60 billion euros in the 2021 budget to the Climate and Transformation Fund null and void. The money had been approved as a Corona loan, but was to be used retrospectively for climate protection and the modernization of the economy. At the same time, the judges ruled that the state should not set aside emergency loans for later years. However, the federal government has done this in special pots - which is now tearing additional holes in the budget. Lindner sees a "need for action" of 2024 billion euros for 17.

Top-level negotiations

SPD leader Lars Klingbeil held out the prospect of difficult talks. Currently, these are mainly taking place in a three-way round with Chancellor Olaf Scholz (SPD), Vice Chancellor Robert Habeck (Greens) and Lindner. There could be talks this weekend. The pressure is on: the coalition must reach an agreement within the next few days if it wants to pass the budget for 2024 before the end of this year. From 8 to 10 December, the SPD party congress will take place in Berlin.

"We will have to deal with three major cost blocks," Lindner told the newspapers of the Funke media group. He mentioned the areas of social affairs, including the citizens' money, international financial aid and unspecified funding programmes. But the coalition partner SPD does not only want to talk about savings, but also puts the agreed renunciation of tax increases up for discussion, as Klingbeil made clear.

Focus on the social budget

According to Lindner, the federal government currently spends 45 percent of its expenditure on social affairs. "We'll see how we can be more accurate." For example, it is a matter of getting people into work more quickly. This benefits the people and also the federal budget.

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With regard to the citizens' allowance, the Finance Minister pointed out that the inflation rate is developing much better than predicted when the standard rate was set for 2024. Inflation had fallen to 3.2 percent in November - the planned increase in citizens' money from January is still based on inflation of 9.9 percent, as the social policy FDP parliamentary group spokesman Pascal Kober had made clear. Lindner said: "The upcoming review of the gap between wages and benefits will therefore have to look at the adjustment process. Because it always has to make a noticeable difference whether someone works or doesn't work."

The SPD wants to oppose cuts in the social sector. "We will not go along with social cuts at the expense of those who have torn their butts open for society," said General Secretary Kevin Kühnert on Saturday at a party congress of the Thuringian Social Democrats in Meiningen. "The SPD is fighting to ensure that it is not an austerity budget, that the poorest are not the ones who suffer," said Kühnert. The goal remains to get a federal budget for the coming year before Christmas.

Where Lindner still wants to save money

Germany is at the forefront of development cooperation and international climate protection financing, Lindner said. "We can happily stay in first place. But maybe the gap to second place can be reduced." Lindner also mentioned funding programmes. "There are numerous subsidies that have to be asked whether they are actually meeting their targets or are not out of date." However, it is still too early to name individual programmes. "Otherwise, this will lead to a run on funding programs in the last few meters." The Greens have spoken out in favour of reducing climate-damaging subsidies. There should be no cuts in the Bundeswehr in view of the changed threat situation since the Russian invasion of Ukraine, Lindner said.

Emergency again?

For 2023, an emergency situation is to be declared once again and the debt brake is to be suspended, the Union does not want to stand in the way. The reason: the ongoing energy crisis following the Russian invasion of Ukraine. Klingbeil wants this to happen in 2024 as well: "There must be savings from the federal government. But in the end, I am firmly convinced of the political conviction: we have to declare the emergency for 2024 because I don't want to get into a situation where we play off Ukraine aid against climate investment," he said. Lindner, however, is very skeptical about this. "I am not yet convinced that a new suspension can be constitutionally justified," he said.

Warning of rising electricity prices

The energy industry warns of rising electricity prices. Without a federal subsidy for transmission grid charges, retail prices would rise significantly, Kerstin Andreae, chairwoman of the executive board of the Federal Association of Energy and Water Industries, told dpa on Saturday. "An affordable power supply is of great importance - also socio-politically - especially in times of uncertainty."

Specifically, it concerns a federal subsidy planned for the coming year to finance the transmission grid costs of up to 5.5 billion euros on a pro rata basis. The money was supposed to come from the Economic Stabilization Fund - but as a result of the budget ruling, the federal government must dissolve this special pot by the end of the year. The money for the subsidy would now have to come from the core budget. Dpa

Source: merkur

All news articles on 2023-12-02

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