Before the budget discussions: “We need a plan B”

Before the discussions on the 2025 budget, the positions within the traffic light coalition appear irreconcilable: SPD and Greens want to remove the debt brake, the FDP wants to save. And the Chancellor? He admits there are problems in the decision-making process.

On Sunday, the coalition parties SPD, Greens and FDP want to begin initial discussions on the 2025 federal budget. There had already been disputes between the three traffic light parties on this issue beforehand. Federal Finance Minister Christian Lindner (FDP) insists on compliance with the debt brake and vehemently calls for savings, for example in the citizens’ allowance. Federal Chancellor Olaf Scholz (SPD) supports the austerity course, while the Greens and large parts of the Chancellor’s party reject it.

“We will not accept such an austerity budget,” said SPD member of the Bundestag Tim Klüssendorf to the Süddeutsche Zeitung. “We need a plan B if things get critical on July 3 and Olaf Scholz cannot agree to 30 billion in savings, but Christian Lindner also does not move.”

According to Chancellor Olaf Scholz, the budget discussions for the 2025 budget are to be completed by July 3. The German Bundestag will be on summer break from July 8 to September 6.

How will the budget gap be plugged in 2025?

SPD leader Lars Klingbeil had previously reiterated the SPD’s view and sharpened the tone. “What is not acceptable is simply cutting 30 or 40 billion from the federal budget,” he told the Reuters news agency. According to the tax estimators’ forecast from May, the state will collect 22 billion euros less in taxes next year than planned; in January there was still talk of a gap of 15 billion euros.

Finance Minister Linder insists on covering the financing gap in the 2025 budget through savings. He had therefore made savings proposals to the federal ministries, but these met with resistance from the Foreign, Defense and Development Ministries. The SPD and the Greens want exemptions from the debt brake because of the war in Ukraine, which FDP leader Lindner clearly rejects: “The FDP’s central condition for joining the Scholz government was that there would be no tax increases and that there would be a return to the debt brake after the enormous Corona debts,” he told the Rheinische Post. He accused the coalition partners of constantly questioning the coalition agreement.

Scholz confirms renewed Candidacy for Chancellor

Against the backdrop of the government parties’ loss of votes in the European elections last weekend, Scholz conceded to the ARD generally acknowledges that there are always problems with decision-making within his governing coalition. In principle, the government has achieved “good results,” said Scholz.

However, “the way in which the decisions were made” has obscured the view of these successes. It was not possible to “get everyone to pull themselves together”. “The citizens have a right to expect that things will be different,” Scholz continued. However, he largely avoided self-criticism. The problems of the traffic light coalition are something that “troubles me,” said Scholz.

On Sunday, the Chancellor will meet with the SPD presidium to analyse his party’s worst result in a national election in more than 130 years. With regard to a renewed candidacy for chancellor in the upcoming federal election in 2025, Scholz has previously made a statement to the ARD confident. When asked whether he was sure he would be the SPD’s next candidate for chancellor, Olaf Scholz replied with a brief “yes.”