Budget crisis: business calls on coalition to reach agreement

Finances - Budget crisis: business calls on coalition to reach agreement

Leading German business associations have called on the coalition government to resolve the ongoing budget dispute quickly. Employers' President Rainer Dulger told the German Press Agency that savings of 17 billion euros in a federal budget of around 470 billion euros must be solvable. "We don't have a revenue problem, we have a spending problem. We don't have a budget crisis either, but a decision-making crisis with a lack of willingness to compromise," he said. "This fuels uncertainty and only increases dissatisfaction with democracy." There was still no breakthrough in the negotiations between the coalition leaders on the 2024 budget on Monday evening.

Talks in the Chancellery again

Federal Chancellor Olaf Scholz (SPD), Finance Minister Christian Lindner (FDP) and Vice Chancellor Robert Habeck (Greens) have been seeking a solution to the budget crisis in three-way talks for days. The three leading politicians also met at the Chancellery on Monday evening. According to the Deutsche Presse-Agentur, the talks were postponed again late on Monday evening. Nothing was initially known about their progress.

The three coalition leaders are struggling to plug a 17 billion euro hole in the 2024 budget and to enable investments in climate protection and the modernization of the economy in the coming years. Scholz had expressed confidence on Monday that the negotiations would soon be concluded. Finance Minister Lindner also spoke of progress in the late afternoon. However, the FDP party leader was not forthcoming about a timetable or the content of the agreement.

Industry president sees uncertainty

Industry President Siegfried Russwurm also called on the coalition to find a quick and viable solution for the 2024 budget. There is already great uncertainty in the industry, he said. "There is less investment in Germany. Many companies are at the end of their tether." The President of the German Chamber of Industry and Commerce (DIHK), Peter Adrian, expressed similar sentiments.

One controversial issue between the SPD, Greens and FDP, for example, is whether the coalition should suspend the debt brake again next year, allowing it to approve billions in loans.

Employer president against suspension of the debt brake

Dulger spoke out against this: It was not the debt brake that was the problem, but high spending and reform fatigue. It was a matter of prioritizing expenditure wisely. "However, the federal budget presented for the coming year provides for more than five times as much expenditure on social welfare, personnel and interest as on investments. That is too much for consumption and too little for the future. This imbalance in the budget must be ended."

DIHK President Adrian said that the federal government was in a really difficult situation. "From a business perspective, I have to say that we have already felt a great deal of uncertainty among companies across almost all sectors due to the economic situation with high energy prices and unclear framework conditions." However, this has now increased even further because the fiscal framework is uncertain. "Nobody currently knows where the train will go in the future. This can be seen in both the innovation climate and the investment climate in Germany," he said. "Unfortunately, both are dramatically poor." There is currently no good basis that would allow many companies to make long-term decisions. There is a lack of reliable framework conditions.

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1. Despite the calls from leading business associations, the budget dispute between the coalition leaders, including Olaf Scholz (SPD), Christian Lindner (FDP), and Robert Habeck (Greens), continues without a breakthrough.
2. Rainer Dulger, the President of German Employers' Association (BDA), criticized the debate as a decision-making crisis, fuelling uncertainty and dissatisfaction with democracy.
3. The budget crisis pertains to plugging a 17 billion euro hole in the 2024 budget, with the three coalition leaders aiming to allocate funds for climate protection and economic modernization.
4. Industry President Siegfried Russwurm echoed Dulger's sentiments, expressing great uncertainty in the industry due to the ongoing budget crisis, leading to less investment in Germany.
5. Peter Adrian, the President of DIHK, agreed, stating that the federal government is in a challenging situation, increasing uncertainty among companies due to uncertain fiscal framework and lack of reliable conditions.
6. One of the controversial topics between the coalition parties is whether to suspend the debt brake next year, permitting billions in loans for funding various projects.
7. However, Dulger opposes the suspension of the debt brake, emphasizing the need for prioritizing expenditure wisely, as high spending and reform fatigue remain the primary issues.
8. Olaf Scholz, the Federal Chancellor, remains optimistic about the negotiations, expressing confidence that a resolution will be reached soon.
9. Robert Habeck, Vice Chancellor and Green Party leader, announced that the coalition leaders will convene again to discuss the budget crisis and seek a solution.
10. Christian Lindner, the Finance Minister, revealed some progress in the negotiations but did not specify a timetable or the content of the agreement.

Source: www.stern.de