Scholz intervenes in budget negotiations

Status: 27.05.2024 17:11

The preparation of the 2025 budget continues to be difficult for the traffic light coalition. Five ministers must now appear before the Chancellery. What it is all about – and what it has to do with pensions.

The traffic light coalition is facing difficult negotiations for the 2025 budget. Federal Finance Minister Christian Lindner (FDP) has called on the ministries to make savings, but several departments are resisting the cuts and demanding more money. Federal Chancellor Olaf Scholz (SPD) now wants to invite the five ministers who do not want to adhere to the savings targets to talks.

In addition to Scholz, Lindner and Vice Chancellor and Minister of Economic Affairs Robert Habeck (Greens) are also expected to attend the meetings. “Handelsblatt” about the meetings between Scholz, Habeck and Lindner with department heads in the Chancellery.

The aim, according to government spokesman Steffen Hebestreit, is for the cabinet to be able to draw up the budget at the beginning of July. A quick agreement is not in sight. Hebestreit spoke of a continuous process over the next few weeks.

Which ministries are involved?

Five department heads are demanding significantly more money than Lindner has planned. According to the report, these are Labor Minister Hubertus Heil (SPD), Foreign Minister Annalena Baerbock (Greens), Development Minister Svenja Schulze (SPD), Interior Minister Nancy Faeser (SPD) and Defense Minister Boris Pistorius (SPD).

They cannot hope for support from Chancellor Scholz. In view of the need to make savings, he has already pointed out the responsibility of all departments. When asked about exceptions to the debt brake in the magazine Stern, he told the magazine: “We should not make life too easy for ourselves. Now it’s time to sweat.”

The SPD only partially shares the Chancellor’s position. SPD General Secretary Kevin Kühnert supported the Defense Minister’s demands for adequate financial resources for the Bundeswehr. “The SPD ministers do not announce anything in the budget for fun, but rather what they consider to be objectively necessary.” However, budget discussions are currently the responsibility of the government and not of the SPD executive committee.

Faeser against cuts

Interior Minister Faeser told Stern that she needed the necessary resources to set up the security authorities so that they could meet the challenges. “That’s why cuts to our security authorities are out of the question for me.”

We need to defend ourselves against more and more cyberattacks, control borders more tightly and for longer, and speed up asylum procedures. “All of this requires personnel and technology. That doesn’t come for free,” said Faeser.

Lindner also insists on guidelines

Finance Minister Lindner warned of a gap in the federal budget in 2025 in the low double-digit billion range. He is determined to comply with the debt brake enshrined in the Basic Law. “We have to come up with a budget that fits the constitution and the economic situation,” said the FDP leader on the ZDF program Berlin direct. For economic reasons, one cannot always take on new debt.

The Finance Minister pointed out that he had set spending limits for the individual ministries. “And our colleagues must now draw up their individual plans and their departmental plans within these limits.” The Chancellor has also publicly supported this. This is also the prerequisite for the second pension package to be discussed in the Federal Cabinet this week.

Debate on pension package II

Heil’s Ministry of Labor and Lindner’s Ministry of Finance had already agreed on the Pension Package II in March, which, among other things, is to fix the pension level at 48 percent for the period after 2025 until 2039. Contributions are to rise in the medium term, to 22.3 percent by 2035.

However, there have been calls for improvements from the ranks of the Liberals for some time. The FDP parliamentary group in the Bundestag had announced that it would not approve the pension package in its current form. The FDP also called for restrictions on the retirement age of 63.

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