So now the air is burning after all

For a long time, the representatives of the traffic light party denied the existential extent of the budget crisis. However, the cancellation of Habeck's trip to the Middle East at short notice indicates the opposite. While the German government is running out of time to find a solution to the 2024 budget, the parties involved are continuing to drive up their prices.

The German government is making measurable CO2 savings in connection with the COP world climate conference in Dubai: Robert Habeck, Federal Minister for Climate Action and Economic Affairs, is not even flying there, and the air force Airbus reserved for him is staying on the ground. The trip, which was also to take the Vice-Chancellor to Saudi Arabia, Oman and Israel, was canceled around 24 hours before departure. Habeck was unavailable due to the ongoing budget crisis in Berlin, according to his ministry. He, Scholz and Lindner obviously want to achieve a breakthrough in the financing of the 2024 budget this week. According to general opinion, this is a prerequisite for the traffic light government to have at least a residual chance of getting the budget through the Bundestag and Bundesrat in the current year.

While the likelihood of an agreement being reached just in time decreases with each passing day, the highly unusual cancellation of the trip at short notice is a belated admission of how critical the government alliance really is. Up until Sunday evening, everyone involved was trying to exude as much confidence and, above all, sovereignty as possible. This impression of having everything under control was just as important to the Chancellery and the ministries of Habeck and Lindner as the solution itself. After all, despite the will to continue working together, there is a real concern within the traffic light of a sudden, uncontrollable dynamic that could lead to the premature end of the traffic light.

No "Plan B" anywhere

On the day the verdict was announced, the top trio issued a concise statement to the public. In it, Scholz announced that the government would now carefully examine the consequences of the ruling. Meanwhile, members of the government factions spread the word that there was a "Plan B" and that the coalition had been prepared for any scenario before the ruling. Two weeks later, at the meeting of the coalition committee, this "Plan B" for the 2024 budget was still not available.

So far, the government has only managed to present a solution for this year's budget because the ruling implicitly also applies to the Economic Stabilization Fund, which financed the energy price brakes, and the Ahrtal Fund. However, the judges in Karlsruhe explicitly overturned credit authorizations of 60 billion euros in the Climate Transformation Fund (KTF), the compensation for which is still unclear. As a result, around 17 billion euros are missing for planned projects in the coming year alone. A similarly large amount is missing for 2025, which is part of the medium-term financial planning that will also be adjusted with the 2024 budget.

Contradictory communication

After the meeting of the coalition leaders last Thursday, it was clear that Scholz, Habeck and Lindner would have to find a solution in a small circle. The coalition committee, made up of representatives from the government, parties and parliamentary groups, lacks the necessary confidentiality for such difficult discussions. However, because Habeck and Scholz wanted to travel to the COP, they would have had to conduct the budget negotiations in telephone and video conferences on the side. At last weekend's meeting between the three heads of the traffic light coalition, each assisted by a state secretary, the realization apparently dawned that this would not work after all.

On Sunday evening, Habeck's ministry announced that it was abandoning the trip to the Middle East. On Monday, government spokesperson Steffen Hebestreit told journalists that Habeck had "decided in consultation with the Federal Chancellor not to go on his trip". The Chancellor and both ministers wanted to "sensibly" talk to each other on site. "After weighing this up, it was agreed that it made more sense to continue the talks than to go on this trip," said Hebestreit. The question is why Habeck's staff declared on the eve that their boss had canceled his trip "in consultation with and at the request of the Federal Chancellor". Hebestreit did not confirm this "request" when asked.

Was it a question of diplomacy not to offend the hosts in Dubai, Muscat, Riyadh and Tel Aviv by apologizing for the last-minute cancellation with a corresponding request from the German head of government? That is possible, but it still gives the impression of ongoing friction in the governing coalition. If the three chief negotiators had managed to achieve a breakthrough at the weekend, Habeck could have gone on his travels. However, Habeck is still needed in Berlin, not only to negotiate with Scholz and Lindner, but also to be able to feed back any negotiation results to the parliamentary group and party.

Serious demands or tactical bluster?

An agreement is made more difficult by various red lines drawn by the top representatives of all three parties involved and their parliamentary groups in interviews up and down the country. The SPD does not want to touch social spending under any circumstances and agrees with the Greens that the inflation compensation for the Citizen's Income in the new year cannot be changed. Both parties also agree that the subsidies in connection with the Heating Act are non-negotiable.

The SPD has at least not backed the Greens on other climate protection projects from the KTF; instead, SPD leader Lars Klingbeil brought tax increases into play at the weekend to finance all of these projects. Although these are just as impossible to achieve with the FDP as a reform of the debt brake - which would also require the approval of the CDU/CSU - the posturing of the SPD and Greens is perhaps also tactical in nature: the more vigorously they wave proposals that are red rags for the FDP, the more face-saving it is for the FDP if it agrees to a renewed suspension of the debt brake in 2024 after all, but has supposedly prevented tax increases in return.

Agreement before the party conference

Conversely, it is striking how vociferously FDP representatives are making demands that are difficult to realize alongside the CDU/CSU: Their proposed waiver of an increase in the Citizen's Income is not feasible without a fundamental change in the law. Both the standard rate and the associated annual adjustment in line with the so-called standard needs-relevant price index are the result of two Federal Constitutional Court rulings: The legislator must grant a humane subsistence minimum - regardless of the participation of the citizen's allowance recipients in the search for employment. A new regulation that conforms to the constitution and noticeably reduces the amount of citizen's income would therefore be neither uncomplicated nor quick.

The coalition is clearly still in the negotiation phase in which all parties are trying to push up the price of a compromise. A breakthrough before the weekend when the SPD meets in Berlin for its federal party conference would certainly be in the interests of the Social Democratic Chancellor. On the other hand, this should certainly not be overshadowed by cuts to core SPD concerns such as pensions and citizens' income.

On the other hand, a basic consensus by Friday would be no guarantee that the budget will be passed in December: the traffic light coalition is dependent on the cooperation of the CDU/CSU, which would have to agree to shorter consultation periods or could take legal action against excessively short consultation periods in the Bundestag. The traffic light is no longer in control of the process. This was already the case three weeks ago, but is becoming increasingly obvious with Habeck's last-minute travel cancellation.