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After weeks of negotiations, the leaders of the traffic light coalition have reached an agreement on the 2024 budget. Where exactly should you save? And how? The most important points at a glance.
What sums are involved?
After the Federal Constitutional Court ruled that the traffic light coalition’s original plans were unconstitutional, around 17 billion euros were missing from the core budget for 2024. In addition, there was around 13 billion euros in the Climate and Transformation Fund (KTF) itself, which supports climate protection projects and the CO2-neutral restructuring of the economy.
What will happen to the debt brake?
The debt brake is expected to largely take effect next year after being suspended for four years in a row – with the exception of the consequences of the Flood disaster in the Ahr Valley and another possible one Escalation of the war in Ukraine.
According to Chancellor Olaf Scholz, the government wants to propose a renewed suspension of the debt brake in order to continue the flood relief fund from 2021. This involves a sum of 2.7 billion euros. Even if the situation in the Ukraine war worsens, an emergency could later be declared in accordance with Article 115 of the Basic Law.
What is changing in terms of climate and Transformation fund?
The traffic light coalition made up of the SPD, Greens and FDP is planning massive savings in the 2024 federal budget. Although it should remain the central instrument of the climate-friendly restructuring, the expenditure of the climate and transformation fund is to be reduced by twelve billion euros next year and by around 45 billion euros by 2027.
In total, it should now amount to 160 billion euros by 2027. The additional income is due to the higher CO2 price obviously included.
How high will the CO2 price be raised?
The traffic light wants to increase the CO2 tax for fuel, heating oil or gas faster than last planned. The price is currently 30 euros per ton, but from 2024 it will now be 45 euros instead of the planned 40 euros. Gasoline becomes about 4.5 cents more expensive per liter. Government revenue would probably be a good one billion euros higher.
When will the purchase bonuses for electric cars end?
The bonuses for buying an electric car are to end earlier than previously planned. Federal Economics and Climate Protection Minister Robert Habeck did not give a date. As things stand, the so-called environmental bonus would run until the end of next year.
And how is solar funding reduced?
Habeck also wants to cut solar funding, but did not give any details. “That hurts me, but that is the price for maintaining the central components, the pillars of the climate and transformation fund,” said the Green politician. This also included help with replacing heaters. These are to be reduced to the tune of three billion euros.
Which climate-damaging ones Subsidies will be eliminated?
This includes the Plastic levy. So far, the federal budget has paid 1.4 billion euros to the EU for environmentally harmful plastic. Now the companies that put plastic into circulation should cover the costs and thus relieve the federal budget.
Other subsidies that have been controversial for years include diesel in agriculture and the tax exemption for aviation fuel. According to information from the dpa news agency, the traffic light is aiming for one Kerosene tax for domestic flights within Germany at.
In addition, tax breaks for agricultural and forestry companies are to be canceled, the so-called Agricultural diesel. Agriculture and forestry companies can request a refund of part of the energy tax paid for their fuel consumption
How should we save on rail?
The KTF was also intended to finance the renovation of the Deutsche Bahn rail network. Around 12.5 billion euros should flow from this by 2027. This sum will now be raised differently, because there should be no savings at the railway.
According to Federal Finance Minister Christian Lindner, the sale of federal holdings should play a role. The railway itself wants to sell its subsidiary Schenker. Other federal investments include shares in Deutsche Post, Deutsche Telekom and Uniper. Together, these shareholdings on the stock exchange are currently worth more than 80 billion euros.
What happens to them? Social benefits?
According to Lindner, there should be no reduction in social standards. However, the finance minister announced savings in Labor Minister Hubertus Heil’s budget, the largest single budget in the budget. More “accuracy in social benefits” is expected to save 1.5 billion euros, for example through better placement of Ukrainian refugees in the labor market.
And where does everything stay the same?
The reductions in income tax and electricity tax already planned for 2024 should not be affected. The funds for the Growth Opportunities Act, which is currently on hold due to resistance from the Federal Council, also remain in the budget. This includes, among other things, tax relief for companies, especially for investments in climate protection.