There is movement in the deadlocked budget dispute over the traffic light: Minister of Finance Lindner has now given the ministries concrete specifications. According to the “Handelsblatt” everyone should save – just not the defense department.
After months of arguments about the federal budget for the coming year, the FDP-led Ministry of Finance has given the departments of the traffic light coalition concrete guidelines. It’s about the funds that should be available to them in 2024.
The houses are now asked to “develop their respective ceilings (upper limit amount) on their own responsibility,” said a ministry spokeswoman. It still applies that the debt brake must be observed. The procedure was coordinated with Chancellor Olaf Scholz (SPD) and Vice Chancellor Robert Habeck (Greens).
The “Handelsblatt” had first reported on Lindner’s specifications. As a result, all departments would have to save – in different amounts and with the exception of the Ministry of Defense. In 2024, some ministries should even be able to get by with less money than was previously planned in the medium-term financial plan.
Overall, it is about savings in the high single-digit billions. However, this will not even close half of the financing gap recently estimated by Finance Minister Christian Lindner at 20 billion euros, the newspaper reported. Most recently, with reference to the deficit, Lindner mentioned, among other things, additional costs due to the collective bargaining agreement in the public sector and higher interest rates.
funding gap versus additional demand
The budget for next year has been causing unrest in the coalition for months. Several ministries reported some additional needs. However, since Lindner rules out both a renewed exemption from the debt brake and tax increases, there is practically no leeway for this.
According to the “Handelsblatt”, investments and social spending for which there are legal entitlements are to be excluded from savings for the time being. On the other hand, the Ministry of Finance also called on the departments in letters in some cases to submit concrete proposals for a planned accompanying law on the budget. Such a plan would make it possible to reduce legally regulated spending on social affairs, but also on subsidies.
“We have to make do with what we have”
The debt brake is a requirement of the constitution and also of “economic reason,” said Lindner at the German Savings Banks Conference in Hanover. There are many desirable projects, but it also applies: “We have to make do with what we have.” The task of politics is to “distinguish between what is necessary and urgent on the one hand and what is desirable on the other hand, but which still needs some time before we can finance it,” said the FDP politician.
Because of the differences of opinion, Lindner had already refrained from presenting the key points for the new budget and the medium-term financial planning of the federal government in March, as is usually the case. Another date was also canceled: The cabinet decision on the draft budget would not be made on June 21, Lindner said in mid-May.
Draft expected before summer break
As reported by government circles, the budget was also a topic in a meeting between Lindner and his colleagues before the cabinet meeting yesterday. Both the finance minister and Scholz emphasized that the draft law should be ready before the summer break. When asked, the Federal Ministry of Finance did not give a specific date for the cabinet decision.
However, Health Minister Karl Lauterbach (SPD) said during a press conference: “We expect the budget to go through the cabinet on July 5th.” The last regular session before the parliamentary summer recess is scheduled for the day. Lauterbach reported that Lindner spoke “very eloquently” about budget planning at the cabinet meeting.