As of: February 19, 2024, 11:35 a.m
By: Babett Gumbrecht
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The mood of crisis is not easing: there is also a gap of at least 13 billion euros in the federal budget for 2025.
Is there a threat of national bankruptcy now?
Berlin – Federal Finance Minister Christian Lindner (FDP) will also have to take the red pen in hand for the 2025 budget planning.
Because it looks like the financial gap for the state budget could be at least 13 billion euros.
The Handelsblatt
learned this
from government circles.
This means that the traffic light coalition is facing further major challenges.
The long-discussed financial plan for 2024 is not due to be approved until next week, but behind the scenes, according to government circles, Lindner is already working on the plan for the next budget.
And that means one thing above all: saving.
It is not yet clear how big the gap will actually be and thus also the austerity measures.
How the gap is made up: interest expenses, flood relief and debt
How much money will be missing from the household depends on various factors.
But some are already clear.
One item on the list is five billion euros that the government has budgeted for the budget gap that still needs to be closed.
Another six billion euros are missing because the traffic light government has already planned a reserve for 2025 for the 2024 budget, writes the
Handelsblatt
.
In addition to around eleven billion euros, there are also interest expenses for the now closed Economic Stabilization Fund (WSF) and aid for the Ahrtal flood disaster in 2021. In short: at least 17.5 billion euros will be missing from the state treasury.
The planned five billion euro savings won't help either.
After all, the government is planning expensive projects such as climate money to relieve the burden on citizens or basic child welfare.
Federal Chancellor Olaf Scholz (SPD), Federal Economics Minister Robert Habeck (Greens) and Lindner will have to discuss in renewed negotiations whether and to what extent these ideas can be realized at all.
Federal Minister of Economics Robert Habeck, Chancellor Olaf Scholz and Finance Minister Christian Lindner (from left) will also have to set the red pencil for the 2025 budget.
© Michael Kappeler/dpa
New loans amounting to 39 billion euros: is there a risk of national bankruptcy?
According to the federal government, the budget for 2024 provides for expenditure of 476.8 billion euros and new loans of around 39 billion euros.
After years of exceptions, the debt brake should be fully effective again, but only with reservations, because the traffic light government is still keeping the idea of suspending the debt brake open.
This was introduced in 2009 to prevent the national debt from growing further.
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However, given the critical budget situation and numerous discussions about savings, the question arises: How long can Germany afford the crisis?
Will a financial debacle and national bankruptcy follow next year?
However, that is not in sight.
Germany is still considered one of the most economically stable countries in the Eurozone with sound financial management and a strong economy.
This is also shown by the indicator, the so-called debt ratio.
Compared to other European countries, Germany's economy remains strong
The debt ratio is an important indicator that measures the level of debt of a country in relation to its gross domestic product (GDP).
It indicates what percentage of a country's GDP is burdened by national debt.
The calculation is done by dividing national debt by GDP and multiplying the result by 100 to express it as a percentage.
A high debt-to-GDP ratio indicates that a country has to devote a significant portion of its GDP to servicing its public debt, which can affect long-term economic stability.
A low ratio, on the other hand, indicates lower debt and potentially a more stable financial situation.
Maastricht criteria regulate the amount of debt: Germany is still below average
For Germany, for example, the debt ratio was 66.3 percent in 2022, according to the
Federal Statistical Office
.
For comparison: Greece had a value of 172.6 in the same year.
France was also among the bottom of the EU table with a debt ratio of 111.6 percent of economic output at the end of 2022.
Unlike Germany, France does not have a debt brake anchored in the constitution and traditionally relies more on debt-financed investments instead of frugal budgeting.
Compared to the two previous years 2020/2021, the debt ratio in Germany has improved: in 2020 it was 68.7 percent and in 2021 it was 69.3 percent.
The point at which the debt ratio poses a serious problem for a country is controversial.
In 1997, the EU member states stipulated in the so-called Maastricht criteria that the quota should not be more than 60 percent.
However, many member states have not been able to do this in recent years.
The EU-wide average was 84 percent in 2022.
This means that Germany is still well below the average.
The extent to which the debt ratio will develop in the country in the next few years now also depends on the government's budget plans and austerity measures.
The fact is: the negotiations for the 2025 budget will not be easy either.