Traffic light budget compromise - Scholz considers draft budget 2025 to be a "good budget"
Federal Chancellor Olaf Scholz defended the coalition's budget compromise against opposition criticism. A way was found to finance both the important tasks of the country and aid for Ukraine without causing restrictions here, Scholz said at a citizen dialogue in Weimar.
"And that's why it's a good budget that the federal government agreed on after such a long time and in a sleepless night," Scholz added. The coalition has struggled hard to reach this deal.
The coalition leaders reached a consensus in lengthy negotiations on Friday night, putting an end to the budget dispute that had been simmering for months. The debt brake will be maintained, and a federal budget crisis, such as due to military and humanitarian aid for Ukraine, was not declared - this was important for the FDP.
"Investment budget increases significantly"
Scholz emphasized during the Thuringian SPD's campaign kickoff that the coalition is doing something for children and families with its budget proposal by increasing child benefits and child allowances. In addition, investments will be made in the infrastructure of the country, such as roads and railways. "The investment budget of the federal government is increasing dramatically," Scholz said.
Investments will also be made in modern infrastructure for Germany's internal and external security, Scholz added. Although the defense budget is only expected to grow by about 1.2 billion euros, while Minister Boris Pistorius (SPD) had demanded more than 6 billion euros, Scholz stressed, "we will provide the necessary money for the security of our country, and that's why we will also improve the equipment of the Bundeswehr more than it was in the past."
Lindner sees "normal budget process"
Christian Lindner, Scholz's cabinet colleague and finance minister, took a relaxed view of the defense minister receiving less money than expected. "The defense minister is getting more money than in the previous budget, but less than he publicly demanded," Lindner told Bild. "That's just the normal budget process." A minister works passionately for their department and naturally demands the maximum. "The task of the finance minister and the federal government as a whole is then to check what is desirable and what is really necessary."
Calls for improvements to defense budget
SPD budget expert Andreas Schwarz called the slight increase in the defense budget a "disappointing figure." "The result of the internal budget negotiations does not meet what we need in the defense sector," Schwarz told Tagesspiegel. Now, parliamentarians have the task of making significant improvements in the parliamentary procedure.
The cabinet is expected to make a final decision on the budget for 2025 on July 17. The Bundestag will deal with it for the first time immediately after the summer break in September. In November/December, the parliamentary approval is usually scheduled.
The Union also sees improvements to the defense budget as necessary. "What we need now are quick prioritization adjustments in the budget that make a sustained and increased defense budget possible," CDU security expert Roderich Kiesewetter told Augsburger Allgemeine.
"With this, we won't be war-ready," said the president of the Reservists Association, Patrick Sensburg, about the modest defense budget of the Federal Ministry of Defense in the next year at Redaktionsnetzwerk Deutschland (RND). "That's disappointing." The former CDU Bundestag member warned: "There will still be gaps all over the place."
After 2025, funding for the Bundeswehr will be "even tighter"
The long-term financing of the Bundeswehr beyond 2025 also needs to lead to heated debates. Chancellor Scholz had spoken of a regular defense budget of 80 billion Euros from 2028 onwards, after the special fund has been completely exhausted. Vice-Chancellor Robert Habeck (Greens) made the challenge clear in the ARD "Tagesthemen": "We'll just make it through in 2025. After that, it will get even tighter."
The counter-financing after the expiration of the 100 billion Euro Bundeswehr special fund has not been found yet. "That's significantly higher than our problem of the last few days or nights," emphasized the Green politician. "I don't want our defense capability to be cut back in education, research, culture, or social benefits."
Habeck: No more debates about a state of emergency
Habeck spoke out against another debate about a state of emergency in parliamentary proceedings. "That debate is over - I wouldn't start it again," said the Green politician. He spoke of a "very, very good package."
Juso chairman Philipp Türmer sees it differently. "They're now using financial maneuvers that the Finance Minister had previously ruled out," Türmer told web.de. Much of it is based on forecasts. In case of tightened global conditions or crises, the budget could easily fall into deficit. "That's why the suspension of the debt brake is still the more sustainable option."
The DGB sees light and shadow
Unions and social organizations reacted ambivalently. DGB Chairwoman Yasmin Fahimi evaluated it as "good news" that larger cuts and social cuts seem to be avoided. The labor policy proposals in total were assessed by the unions as the wrong signal.
The chairwoman of the Social Association of Germany (SoVD), Michaela Engelmeier, highlighted in the Funke Media Group newspapers that it seemed to have succeeded in preventing "a further social decline in decisive areas." However, she also criticized that "the major distributional issues are no longer being solved with this coalition because we can't agree on the necessary courageous tax reform."
The Union sees the Ampel compromise as no signal for their stability
The Union sees no signal for their stability in the Ampel compromise. "It could be that we have to come to Berlin again soon," said Union fraction leader Friedrich Merz to the "Rheinische Post." "The Ampel coalition is not that stable that it can be sure to last through the summer."
Does the growth package really bring growth?
According to the CDU/CSU opposition's assessment, the growth package planned by the traffic light coalition along with the budget will not sustainably boost the German economy. "The alleged growth package is just as weak as the traffic light. Small-small tinkering instead of noticeable impulses for the economy," explained the economic spokesperson of the CDU/CSU Bundestag faction, Julia Klöckner. Important structural reforms for more competitiveness, such as capping labor costs, more flexible working hours, and corporate tax reform, were missing.
- Federal Chancellor Olaf Scholz, from the SPD, defended the budget compromise of the Coalition against criticism from opponents.
- The German Armed Forces will receive funding without causing restrictions to the household budget, as Scholz assured during a citizen dialogue in Weimar.
- Andreas Schwarz from the SPD serves as the party's budget expert in parliament.
- The FDP, led by Robert Habeck, was a crucial player in maintaining the debt brake while providing aid for Ukraine.
- Boris Pistorius, from the SPD, serves as the Minister of Defense in the Federal Government.
- Christian Lindner, the finance minister and a key member of the FDP, took a relaxed view of the disagreement between Scholz and Pistorius over defense funding.
- Olaf Scholz, in his speech at the SPD's campaign kickoff, highlighted the budget's focus on children and families by increasing child benefits and allowances.
- Ulrich Graf, from the CDU, criticized the budget compromise, claiming it failed to adequately address Germany's security concerns.
- The Coalition, led by Olaf Scholz, Chancellor, and Olaf Scholz, Minister of Finance, reached a budget agreement for 2025 that includes funding for Ukraine's aid and a significant increase in the investment budget.
