Suddenly Christian Lindner is dictating the government's course

Agreement in the budget dispute - Suddenly Christian Lindner is dictating the government's course - not the chancellor

Wednesday lunchtime, early Christmas presents in the Chancellery: Olaf Scholz presents the agreement in the budget dispute with his deputy Robert Habeck and Finance Minister Christian Lindner after agonizing negotiations and a sleepless night. And Lindner? Turns away first. The Liberal reported that the cabinet had dealt with the first issue of loneliness. "However, I can say that the three of us have not been affected in recent weeks," he says, looking down briefly as if he has to stifle a smile.

The mood is good, at least for one of them.

It took the coalition leaders four weeks to clarify how to plug a 17 billion euro hole in the budget for 2024 after the humiliating Karlsruhe ruling on the climate fund and whether this government still has a future at all. In recent days, Scholz, Lindner and Habeck have acted as if they were out collecting money. They have been looking for potential savings of a billion here and a billion there in order to somehow find the large sum that was missing from the budget after the court ruling. An agreement has now been reached in principle. But it is unclear whether it will really bring this coalition back together. Who can be satisfied? Who must fear being punished for the painful process?

Christian Lindner can be satisfied

Of course, Lindner also has to communicate a few things to his party and parliamentary group that he would have preferred to avoid. No tax increases? Well, almost. There is a tax increase for farmers who need agricultural diesel. There is an indirect tax increase for everyone who wants to fly within Germany. And from 2024, there will be a CO tax of 45 euros per tonne, five euros more than the traffic lights had previously planned.

Lindner can cope with the first two small reforms and sell them as a reduction in climate-damaging subsidies. This is not a new proposal; the Liberals have already committed to this goal in the coalition agreement. The higher CO2 tax and the resulting rise in fuel prices may certainly annoy the hum-rum wing of the FDP, but Lindner can still sell it as a success: More climate protection through price signals, not bans.

There is also the matter of the emergency situation. A term that Scholz and Habeck do not even utter - probably out of consideration for the Finance Minister and his party, who did not want precisely this exception for 2024. That in itself is a small victory on points for Lindner, who had ironically avoided using the term at a recent press conference.

The emergency is like a pregnancy

In the meantime, the Chancellor may have looked again in the Basic Law to see exactly what Article 115 on the debt brake says. According to this, in emergency situations "credit ceilings may be exceeded on the basis of a resolution passed by a majority of the members of the Bundestag". From this, it seems that Scholz has coined a new word for the process that simple minds simply understand as "determining an emergency situation": The Chancellor now prefers to speak of an "overrun resolution".

It is precisely this resolution that Scholz is now planning for the coming year in order to be able to provide the victims of the Ahr valley flood with further aid amounting to 2.7 billion euros. And with such an overrun decision aka emergency situation, it's like a pregnancy. Either you determine the condition - or you don't. De facto, the state would therefore borrow more money in 2024 than the debt brake actually provides for. In concrete terms, however, it is only a matter of 2.7 billion euros. With a total budget of around 450 billion, that's peanuts.

At the press conference, the Finance Minister was not entirely clear about this. Lindner could be understood as still examining whether this step was absolutely necessary in a narrowly defined emergency situation. Or, on the other hand, as if he didn't want to be blamed for this small amount by other debt strivers: forget it! When FDP politicians now rejoice that no emergency will be declared in 2024, this is a bit of a cheat. However, the underlying spin - Lindner delivers solid finances - will probably prevail.

Robert Habeck is being fleeced

If the actual main communicator of the traffic light, Minister of Economic Affairs Robert Habeck, gets lost in mirror sentences and, for once, no story emerges in the course of his remarks that gives the whole endeavor a deeper meaning, then this may be due to two reasons: He himself does not yet quite know what to make of this agreement. Because apart from the fact that the mere fact of the agreement is somehow keeping the traffic lights alive, things have otherwise not only gone well for Habeck - reason number two - but also partly at his expense.

Of course, it was not to be expected that "his" climate and transformation fund would get off scot-free - especially as the whole mess with the budget was caused not least by the fact that the judges in Karlsruhe shrank this fund by 60 billion euros. But twelve billion euros is not chump change. That is how much less is to flow from the fund next year alone. 46 billion will be cut over the next four years. The solar industry is the first to be hit, and subsidies for electric cars are also being phased out. But the chip factories will continue to receive billions?

Bitter.

Nevertheless, Habeck should be able to face his supporters with his head held somewhat high, even if not all the details are known yet: Not so much because he protected the promised heat pump subsidy from the lawnmower, but rather because he was able to bring the Greens at least a small trophy - the start of the dismantling of climate-damaging subsidies: a tax on aviation fuel for domestic flights and an end to the diesel privilege for farmers. In addition, Habeck seems to have saved the basic child protection scheme so vehemently demanded by the Greens and so vehemently rejected by the Liberals, at least for the time being.

The SPD is licking its wounds

How the comrades had celebrated their chancellor. For his clear words, his clear stance. And his promise: "There will be no dismantling of the welfare state in Germany in a situation like this," said Scholz at the SPD party conference with regard to the budget crisis. That was on Saturday. And now?

Now the comrades have to digest the fact that cuts of 1.5 billion euros are also to be made to the welfare state. Through "more accuracy", as Finance Minister Lindner said. For example, refugees from Ukraine are to be better and more quickly integrated into the labor market, explained the FDP leader. More details are not yet known.

The agreement between the leaders of the "Ampel" party is likely to cause further discussion within the SPD. At their party conference, the comrades had decided to declare an emergency situation for 2024 and to repeatedly relax the debt rules. This was intended to prevent cutbacks of any kind. Nothing will come of this for the time being. Instead, the main focus will be on savings and restructuring in order to scrape together the billions missing from the 2024 budget.

What can you say to that? Many comrades probably don't really know yet. A kind of formulation aid is circulating in the Chancellor's party on how to assess the budget agreement. It also refers to the party conference at the weekend, where a "clear line was set out" as to what the budget should achieve: Modernization of the country, no threat to social cohesion and continued support for Ukraine. "These requirements of the SPD have been realized in the agreement," says the internal paper, which is available to stern.

It also emphasizes that there will be no dismantling of the welfare state. And yet the paper admits: "Cuts in the individual budget items are painful for the SPD". All of this has not only become necessary due to the Karlsruhe ruling, "but above all due to the rigid rules of the debt brake", which no longer fit the times and would "unnecessarily slow down the country".

However, a comprehensive reform of the rule has become anything but likely as a result of today's ruling.