After weeks of political wrangling and tough austerity decisions, the federal budget for the current year is in place. According to information from the German Press Agency, the Bundestag’s budget committee decided on a budget on Thursday evening with expenditure of around 476.8 billion euros and new loans amounting to around 39 billion euros. After years of exceptions, the debt brake should be fully effective again – at least for the time being. The Bundestag and Bundesrat are due to make a final decision on the 2024 budget at the beginning of February.
However, the so-called cleanup meeting of the powerful budget committee is already considered a decisive stage. The most important questions have been clarified. Dennis Rohde (SPD), Sven-Christian Kindler (Greens) and Otto Fricke (FDP) explained after the meeting that the budget was balanced “despite the difficult initial situation of these parliamentary deliberations”. The focus would be on social justice, economic incentives including tax policy, investments in climate protection, strengthening democracy and international cohesion. At the same time, subsidies would be reduced.
Fill billions in holes – with controversial measures
Actually, the federal budget for this year should have been dry by now. However, a groundbreaking ruling by the Federal Constitutional Court in mid-November thwarted the traffic light coalition’s plans. The result: billions in holes had to be plugged in the budget and in the climate and transformation fund; the leaders of the SPD, Greens and FDP negotiated this for weeks. The most controversial measure is the gradual abolition of tax relief for farmers on agricultural diesel. The traffic light continues to adhere to this despite massive protests.
In a hastily passed supplementary budget for 2023, the traffic light again suspended the debt brake. The budget for 2024 was also in jeopardy after the Federal Constitutional Court’s ruling. The main point of contention was the question of whether the debt brake should be adhered to this year or suspended again, especially since Finance Minister Lindner identified a budget gap of 17 billion euros.
Before the Budget Committee meeting began, it was announced that the traffic light coalition had agreed on previously requested changes. The federal government actually wanted some of its subsidies from the Federal Employment Agency from the Corona period back. The plan is now off the table, as Green Party chief budget officer Sven-Christian Kindler said. In addition, the planned tightening of possible sanctions on citizens’ money is to be limited to two years, as the German Press Agency learned from coalition faction circles.