Following the tax calculation, the heated tension in the traffic junction intensifies.
The anticipated tax revenue projections don't alleviate the traffic light predicament; instead, they exacerbate it. The deficit in the federal budget has widened further.
Some within the traffic light coalition had optimistically anticipated these figures: How much tax revenue will be collected next year - and might it potentially resolve the intricate issue with the 2025 federal budget? Now, the estimators have presented their forecast, providing a definitive answer. They forecast a minor surplus for the federation, but the federal budget deficit is still growing, according to Federal Finance Minister Christian Lindner - and substantially so. This is exacerbating the internal budget disagreements within the traffic light coalition. Additionally, economic associations and trade unionists view the tax forecast as a cautionary tale.
Federal Finance Minister Christian Lindner sees no space for "additional spending desires" following the tax forecast. The federal government must instead persist in its consolidation strategy, rather than participating in "redistribution politics," he stated. Examining the forthcoming final negotiations on the 2025 budget, Lindner still perceives a financial gap of several billion euros. This pertains to inefficient subsidies and the adequacy of the welfare state: "Specifically, we will have to initiate a new discussion regarding further measures, such as the citizen's allowance."
SPD parliamentary group leader Rolf Mützenich called upon Federal Chancellor Olaf Scholz to stand firm against the FDP during the budget dispute. "Olaf Scholz must keep these issues at the forefront," he stated to the "Süddeutsche Zeitung" regarding economic investments. He reiterated his call for relaxing the debt brake for this purpose. However, Lindner emphasized that he would not dispute the debt brake.
Deputy Chancellor Robert Habeck advocated for prompt execution of the growth initiative. However, he also underscored the necessity of "further forceful measures" for a "significant trend reversal" to revive the economy. Last week, Habeck proposed a multi-billion euro "Germany fund" from which, for instance, small businesses and medium-sized enterprises would benefit. Lindner has already denounced this proposal.
With the tax forecast, the already challenging negotiations on the 2025 federal budget enter their final stage. Lindner remains committed to passing the budget in the Bundestag by the end of November. Moreover, representatives of the SPD and Greens remain hopeful about adhering to the schedule. The Union, however, disagrees: "The budget issues remain unresolved," stated the spokesperson for budgetary affairs of the Union faction, Christian Haase: "Three years of traffic light coalition with two years of recession have left apparent negative impacts. The country appears stagnant."
Both the Federal Association of German Industry (BDI) and the German Trade Union Confederation (DGB) view the tax forecast as a warning to the federal government. The industry association demanded "growth-encouraging programs" such as bureaucracy reduction and tax cuts for companies, while the trade unionists called for a suspension and, in the long term, a reform of the debt brake to facilitate state investments.
Federal Finance Minister Christian Lindner, in response to the tax forecast, has ruled out any considerations for "additional spending desires" and advocates for continuing the consolidation strategy. This stance is causing further budget disagreements within the traffic light coalition, and the anticipated minor surplus does not alleviate the widening deficit in the federal budget, making budgetary policy a pressing concern.
The tax forecast, viewed as a cautionary tale by economic associations and trade unionists, suggests that the growth of the federal budget deficit necessitates reevaluation of budgetary policies. The BDI and DGB, in particular, have called for growth-encouraging programs and a suspension of the debt brake, respectively, to facilitate state investments and stimulate economic growth, emphasizing the importance of budgetary policy in addressing the current fiscal challenges.
