Budget decision delay by traffic light organization
Until July 3rd, the traffic light coalition had initially planned to settle on the budget for the forthcoming year in the cabinet. However, this won't transpire, as per intel from RTL/ntv. A new potential date under consideration is July 17th now. Yet, tensions remain over several areas.
It's clear now that the German government doesn't anticipate reaching a budget draft agreement for 2025 by early July. This was corroborated to RTL/ntv by coalition sources. July 3rd won't serve as the decisive term for the cabinet decision, as reported by Reuters, quoting two insiders.
Instead, July 17th is being mulled over as the new date, according to Reuters. This would enable all deadlines for submitting the draft to the Bundestag to be observed. A spokeswoman from the Federal Finance Ministry remained reserved in response to Reuters' inquiry. "The deliberations on the budget draft for 2025 and measures to combat the growth slump are still ongoing," she said. "Political agreement and a cabinet decision in July remains unaltered."
Earlier, both Federal Chancellor Olaf Scholz of the SPD and the FDP had advocated for a protracted negotiation period until the end of the upcoming month publicly. "It's not about July 3rd, but about the cabinet setting a budget in July," said FDP parliamentary leader Christian Dürr on ZDF's "Morgenmagazin."
At the same time, Dürr reiterated the FDP's demands. "The debt brake must be maintained," he said. Unlike during the Corona pandemic, there's no longer an extraordinary situation that would strain Germany's tax revenues and warrant exceptions. Priorities should be set, and taxpayer funds should be utilized prudently. "I was therefore glad that the Federal Chancellor reiterated that sentiment again.” Scholz had defended the budget's planned savings on Sunday in the ARD.
A financial void of at least 25 billion Euro
For weeks, Scholz, Finance Minister Lindner, FDP leader Christian Lindner, and Economics Minister Robert Habeck of the Greens have been primarily focused on the intricate details of the budget for 2025 and financial planning up to 2028. Also, a dynamic package for enhanced economic growth is in the works.
The main disagreement revolves around bridging a financial void of at least 25 billion Euro. Ministries such as the Foreign Office, Development Ministry, or Labor Ministry are planning significantly higher expenditures than the financial planning allows for.
Lindner continues to insist on savings and debt brake compliance. However, parts of the SPD and the Greens are pushing for exceptions to the debt rule to allow for more borrowing. The pressure from the SPD parliamentary group intensified on Monday: All three faction wings, from the conservatives to the left, are demanding exceptions to the debt rule.
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Despite the initial plan to settled the budget for 2025 by July 3rd, the traffic light coalition, composed of SPD, FDP, and Alliance 90/The Greens, has encountered delays. Negotiations on the budget draft and measures to combat the economic slump are still ongoing, with July 17th now being considered as a potential new date for the cabinet decision.
Tensions remain within the coalition over several areas, particularly the bridging of a financial void of at least 25 billion Euro. FDP leader Christian Lindner advocates for savings and compliance with the debt brake, while parts of the SPD and Greens push for exceptions to the debt rule to allow for more borrowing.
