Lindner plans new debt of 40 billion euros
The traffic light is in difficult negotiations over the budget and time is running out. A persistent issue is the debt brake - the FDP insists on its enforcement. However, Finance Minister Lindner apparently plans for a higher new borrowing than in the previous year.
In the draft budget for 2025, Finance Minister Christian Lindner plans for a new borrowing of approximately 40 billion Euro. This was learned by "Spiegel" from coalition circles, and the magnitude was confirmed in the Federal Finance Ministry. The amount consists of various components.
According to the provisions of the debt brake, the Federal Government, including the conjunctural stimulus in the coming year, is allowed to take on new credits worth 24.2 billion Euro. In addition, there is a subsidy of 12.4 billion Euro for the pension scheme, known as the "generational capital." This amount is disregarded in the context of the debt brake because the Federal Government's new obligations are offset by an equivalent asset position. The same applies to the planned capital injection for the railway, worth around five billion Euro.
This results in a slightly higher net credit intake for the next year compared to this one. Lindner plans to take on 39 billion Euro in new credits in 2024. However, the Finance Minister also intends to bring a supplementary budget for this year onto the legislative agenda, according to "Spiegel."
This supplementary budget would allow Lindner to take on an additional 12 billion Euro in new debts in 2024. The larger borrowing capacity would be possible because, with a supplementary budget, the conjunctural stimulus would have to be recalculated within the debt brake. Given that the economic development has significantly slowed down, the stimulus now amounts to a higher figure.
Chancellor Olaf Scholz has been in negotiations with Lindner and Economics Minister Robert Habeck for weeks over the budget plan. Initially, they aimed to complete the negotiations by the previous Wednesday. Now, the 17th of July is being considered for the cabinet decision. To meet this deadline, a consensus on the fundamental principles is necessary in the coming days because the drafting of the budget law usually takes about ten days. The SPD parliamentary group is pressing for a consensus by Friday and is increasing the pressure on the coalition partners with an announced special session.
In these challenging budget negotiations, Christian Lindner, as Finance Minister, proposes a higher new borrowing of 40 billion Euro for 2025, surpassing the previous year's amount. Despite the FDP's insistence on enforcing the debt brake in the Traffic light coalition's politics, this plan might necessitate a supplementary budget, allowing for an additional 12 billion Euro in debts.
