Federal budget 2024: Capable of action, yes – but also viable for the future?

Following the Federal Constitutional Court’s budget ruling, the government coalition has finally closed the gap for 2024. In doing so, she demonstrates her ability to act. However, she ignores future problems.

Is the traffic light coalition still capable of governing? This question could be seriously asked after the Federal Constitutional Court exposed the debt trickery of the SPD, Greens and FDP as unconstitutional.

The self-proclaimed “Progress Coalition” in Berlin had to cut 60 billion euros from its financial planning and, to the astonishment of the public, had no plan B for how it would otherwise finance its ambitious policies.

After the Karlsruhe ruling, there was also a 17 billion euro gap in the budget for the coming year. And it took the trio of Chancellor, Vice Chancellor and Finance Minister a solid four weeks to align their common policy with reality and set new priorities.

Everyone insisted on their positions

All three coalition parties stuck to their positions until the end: the SPD declared social cuts a taboo, the Greens emphasized their priority for climate protection, and the FDP made adhering to the debt brake a mantra.

Again the question was obvious: Can the traffic lights do that? Can it free itself from this budget crisis – and give citizens a vision again, including the recession-stricken economy?

Cuts that will hurt

The answer is: well. The budget gap has now been closed, with a whole bunch of cutting measures that will certainly hurt in one place or another. Soon there will no longer be any premiums for buying an electric car, solar systems will no longer be subsidized as much, and filling up with gas will be noticeably more expensive due to a higher CO2 price.

Fortunately, Olaf Scholz, Robert Habeck and Christian Lindner did not dare to make any compromises when renovating the railway. And their commitment to the debt brake comes with a back door: If Ukraine needs more military aid, the only way to do so would be through a new special fund. So debts.

Savings campaigns miss the actual issue

It’s not all that big of a deal. Because the rather small-scale savings campaign by Scholz, Habeck and Lindner misses the actual topic: Our state lives beyond its means, and the three of them know that too. But no one dares to talk about it openly. The budget hole that has now been filled is a piece of cake against the major financial risks of the next few years.

The special fund for the Bundeswehr, for example, will be used up at some point – and then? The federal government’s subsidy for pension insurance is getting out of hand – where is the remedy? And what if a new virus spreads in Germany? The traffic light’s financial planning does not have any reserves for all of these cases – and the Federal Constitutional Court has closed the door to further debt except for a small gap.

So for now the traffic light has been saved. She is able to act – until further notice. But future viability looks different. We succeeded in maintaining power – the coalition owes us progress.