The gap in the federal budget for the coming year is apparently not quite as large as previously assumed. As the Southgerman newspaper learned from government circles that, contrary to previous statements by Finance Minister Christian Lindner (FDP), the deficit is not 17 billion euros, but noticeably less. At one point there was talk of almost twelve billion euros.
The reason is, among other things, that according to the Federal Constitutional Court’s most recent budget ruling, the government will need less money to finance its so-called special funds in 2024 than initially planned. This also reduces interest costs, which are also reduced by the fact that several government bonds linked to the development of the inflation rate will cost the federal government less than expected. There are also some expenditure items that are not so significant. According to the information, this includes, among other things, the support services that the federal government has to provide for the living expenses and housing costs of the long-term unemployed.
The federal government will have to borrow less money in 2024 than in 2023
Last week, Chancellor Olaf Scholz (SPD), Economics Minister Robert Habeck (Greens) and Finance Minister Lindner agreed on a package of measures to help close the budget gap. However, the traffic light coalition has been talking about the result for days. Lindner questioned the introduction of a kerosene tax on domestic flights, the SPD parliamentary group criticized the abrupt end of e-car funding, and Agriculture Minister Cem Özdemir (Greens) criticized the planned removal of tax breaks for farmers. It is therefore still unclear what the strike list will look like.
The federal finance agency announced that in 2024 the government would borrow significantly less money from insurance companies, pension funds, private citizens and other long-term investors than in the current year. In total, they want to issue federal securities with a volume of 440 billion euros, it was said on Tuesday.
That would be around 60 billion euros less than at the end of the year, in which the government set a new record with around half a trillion euros. The money will be used to offset the expected deficit in the federal budget. In addition, the federal government will have to pay back securities worth almost 343 billion euros to investors next year. This requires refinancing.