Traffic light coalition: Scholz confident of an early solution to the budget dispute

There is apparently movement in the discussions on the federal budget. Chancellor Scholz expressed optimism that the negotiations could be concluded soon. The debt brake remains a major point of contention – the CDU is threatening to sue.

Chancellor Olaf Scholz has expressed confidence that negotiations over the billion-dollar hole in the 2024 budget will soon be concluded. The task is indeed big, said the SPD politician. “But we have made so much progress that you can be very confident that we will be able to communicate the result to you soon.” A government spokesman said that the negotiations were “very advanced” and that many questions had already been clarified in good, confidential discussions.

Scholz has been looking for a solution to the budget crisis for weeks in three-way talks with Finance Minister Christian Lindner and Vice Chancellor Robert Habeck. Late on Sunday evening the talks were postponed until today.

SPD leader Saskia Esken also spoke of progress. “Something will happen now. And then we will have a basis to continue governing,” she said together Morning magazine from ARD and ZDF. All three traffic light parties had signaled that they wanted to reach an agreement.

FDP: No exit from the traffic lights

FDP parliamentary group leader Christian Dürr was similarly confident, saying he believed the budget dispute could be solved. “The situation is not a procedure,” said Dürr Deutschlandfunk to the coalition’s internal discussions. A gap of 17 billion must be closed in the 2024 budget – “that is manageable,” he said. However, the coalition’s discussions are time-consuming given the complexity of budget preparation.

Dürr clearly rejected speculation about a possible exit of the FDP from the traffic lights. “My firm wish is that we continue to be part of a federal government that continues to shape things.” If the FDP were not there, things would look different in Germany, said Dürr. “We would probably have debt levels that were similar to those during Corona times and that would be wrong.” Transport Minister Volker Wissing had previously made a clear commitment to his party remaining in the traffic light coalition.

FDP rejects weakening of the debt brake

At the same time, the FDP reiterated its red lines in the negotiations. Secretary General Bijan Djir-Sarai strictly rejected easing the debt brake as well as tax increases. “Tax increases would simply be poison for economic development in our country. And we don’t want that. And we won’t allow that either,” he said. Compliance with the debt brake anchored in the Basic Law is also extremely important for the Free Democrats.

At the weekend, the SPD called for a renewed budget emergency to be declared in order to suspend the debt brake because of the Russian war of aggression in Ukraine. The deputy SPD chairwoman and Prime Minister of Saarland, Anke Rehlinger, warned of an “austerity spiral, at the end of which nothing blessed will be found.” As a solution, she could imagine suspending the debt brake for 2024, said Rehlinger. “It certainly requires effort, but we really shouldn’t shy away from it.”

CDU does not rule out further lawsuits

The parliamentary managing director of the Union faction in the Bundestag, Thorsten Frei, did not rule out another Union lawsuit before the Federal Constitutional Court in this case. Of course you have to “look at things very carefully,” he said. As of today, he can only say: “If the coalition also wants to fix the 2024 budget by lifting the debt brake and declaring a state of emergency, then in my opinion we would have to sue against it. Because that is obviously unconstitutional.” One cannot declare the crisis to be the norm and thereby systematically circumvent the debt brake in the Basic Law.

In mid-November, following a lawsuit from the Union parliamentary group, the Federal Constitutional Court declared the reallocation of 60 billion euros in the 2021 budget to the climate and transformation fund to be null and void. The judges also decided that the federal government cannot set aside emergency loans for later years. This resulted in the current starting position for the 2023 budget, for which the debt brake is now to be suspended again afterwards, and above all for the budget for next year.