Supplementary budget 2023 on the way

Government - Supplementary budget 2023 on the way

There is still no solution in sight for the 2024 budget, but at least the repair of the current budget is making progress. On Thursday, the Federal Council passed the supplementary budget for 2023 at first reading. This also includes the renewed suspension of the debt brake. Both can now be passed in the Bundestag next week.

With the supplementary budget, the federal government wants to legally secure funds that have already been disbursed, in particular for the gas and electricity price brakes and flood aid. This involves around 45 billion euros that were financed from loans.

Since the Karlsruhe budget ruling, it has been clear that the federal government should not have taken out these loans without further ado. They were approved in 2021 and 2022 when the debt brake was suspended due to the coronavirus crisis and the war in Ukraine. The traffic light government had planned to continue using the money in 2023 and 2024. However, the judges in Karlsruhe ruled that the federal government may not set aside emergency loans for later years. Without the supplementary budget, the budget for 2023 would have been in breach of the constitution.

The state chamber refrained from making an explicit statement on the plans. They were then approved by the Budget Committee. The next step is now the final reading in the Bundestag next Thursday.

Still no solution for the 2024 budget

This should solve the first major problem caused by the Karlsruhe budget ruling. The highest German court had declared a reallocation in the budget null and void. As a result, there is not only a shortfall of 60 billion euros that had been budgeted over four years for climate protection projects and the modernization of the economy. The ruling also had an impact on various credit-financed special funds. There is a gaping hole of 17 billion euros in next year's budget.

Federal Chancellor Olaf Scholz(SPD), Finance Minister Christian Lindner (FDP) and Economics Minister Robert Habeck (Greens) have still not found a solution. On Wednesday, they continued their discussions until late in the evening. It now seems unlikely that the budget for 2024 can be passed in all instances, including the Bundesrat, before the end of the year. Coalition circles have pointed out that the members of the Bundestag must be given enough time to examine the proposals of the coalition leaders. From Friday, the SPD will also meet for its three-day federal party conference - Scholz is due to speak there on Saturday.

Federal Council President Manuela Schwesig urged the government to move more quickly. Mecklenburg-Western Pomerania's SPD Minister-President said that clarity was needed quickly on how the federal government intended to structure the budget for the coming year. "This is what local citizens are waiting for, and above all what the economy is waiting for." It is time for the traffic light government to present its proposal now so that the unrest and uncertainty are over.

Klingbeil confident

SPD leader Lars Klingbeil expects a "political clarification" before the end of the year. Following an agreement between the top trio, there will still have to be a coalition committee. "In the end, it's clear that it's not up to the three of them, but the parties, the parliamentary groups, must decide together with the government," Klingbeil emphasized on the ARD programme "maischberger".

SPD budget politician Andreas Schwarz told the Bavarian media group's newspapers that he believed "that it will come down to a provisional budget". This means that the budget will not be decided until the new year - then a provisional budget would apply at the beginning of January, only necessary expenditure would be permitted. "All I know is that there will be calm between December 24 and 26. What happens next is still open," said Schwarz.

In addition to another exception to the debt brake, cuts in various areas are also being discussed. Lindner emphasized that subsidies must be examined for their benefits. "But it is not uncommon for people to talk about supposed privileges and then end up burdening the working population," he told Wirtschaftswoche.

"Let's first look at where the state can make better use of the money it has and achieve its goals more efficiently. This applies in particular to the enormous increase in social spending," emphasized the FDP leader. This is where the money must be used more effectively. "We need to get more people into work who are now claiming citizens' benefits."