The federal government wants to make savings in these areas
Almost a week after the agreement reached by the coalition leaders in the budget crisis, the federal government has presented a list of cuts. The federal cabinet is due to approve it tomorrow, but some of the compromises are still politically controversial. Parliament could therefore still make changes before the planned Bundestag resolution on the budget for 2024 at the end of January.
Savings of around 17 billion euros in the core budget were necessary following the Karlsruhe budget ruling. The plan for the Climate and Transformation Fund (KTF) with billions in investments in the modernization of the economy also had to be revised. Ultimately, there was a funding gap of almost 30 billion euros, according to government spokesperson Steffen Hebestreit.
A solution could be found by abolishing climate-damaging subsidies, reducing expenditure by ministries, better integration of refugees into the labor market and reducing federal subsidies. The most important resolutions at a glance:
-Subsidies will be cut, tax breaks for farmers will be abolished:
Motor vehicle tax will be payable for vehicles used in agriculture and forestry in future. This is expected to generate additional revenue of 480 million euros. The abolition of tax concessions for agricultural diesel is expected to generate a further 440 million euros.
-Higher ticket tax for flying. The air traffic tax will be increased:
In addition, a reduction mechanism is to be abolished that kicks in when revenue from emissions trading for air traffic increases. Together, this is expected to generate up to 650 million euros next year.
- Companies to pay plastic levy themselves:
Until now, the German government has paid a plastic levy to the EU; in future, manufacturers are to pay this themselves. This is expected to generate additional revenue of 1.4 billion euros.
- Less money for international engagement:
A total of 800 million euros will be cut from the budgets of the Federal Foreign Office, the Ministry of Economic Affairs and the Ministry of Development. The Ministry of Transport will have to contribute 380 million euros and the Ministry of Education 200 million euros.
- Less federal subsidy for pensions:
The statutory pension insurance scheme will receive 600 million euros less from the federal government. At the same time, a pension level of 48% is to be guaranteed until 2039. The pension level indicates what percentage of the current average wage someone who has always worked and paid contributions at the average wage for exactly 45 years will receive as a pension.
- Employment agency pays money back:
The Federal Employment Agency is to pay back 1.5 billion euros to the federal government that flowed as a subsidy during the corona crisis.
- Rebooking of weapons purchases:
The Bundeswehr is repurchasing weapons that were given to Ukraine from its own stocks. This is now not being financed from the federal budget, but from the special pot for upgrading the Bundeswehr. This results in 520 million euros less expenditure in the budget.
- Cuts to the citizens' allowance:
Bonus payments for further training will be removed from the citizen's allowance, and there will also be sanctions for total refusers. According to the Ministry of Finance, this will save 250 million euros.
- Job turbo for refugees:
More is to be achieved in the integration of refugees into the labor market. This includes more frequent contact and sanctions for breaches of duty. The federal government expects this to save around 500 million euros.
- Cuts to the climate and transformation fund:
The program expenditure of the special fund for climate protection will be reduced by 12.7 billion euros. Among other things, subsidy programs would be abolished where products had established themselves on the market, it was said across the board. At the weekend, the Ministry of Economic Affairs had already announced the end of the environmental bonus for electric cars. In addition, a 5.5 billion euro subsidy to reduce grid fees for the electricity grid will be discontinued.
- Higher CO2 price for refueling and heating:
This should generate more revenue for the KTF. The CO2 price on heating oil, gas and fuel will rise from 40 to 45 euros per tonne of CO2 at the turn of the year.
- Equity increase for the railroads:
To enable the railroads to make urgently needed investments despite the cuts in the KTF, their equity is to be increased by up to 20 billion euros over the next few years.
- Less money for the federal states:
The federal government is cutting 350 million euros from the regionalization funds that the federal states receive to finance rail transport.
The federal government is also saving several billion euros in the new budget simply because forecasts are becoming more realistic. It is now assumed that interest expenditure will be 2.3 billion euros lower. In addition, the federal government is dipping around 3.2 billion euros deeper than planned into a reserve that was accumulated during the refugee crisis. However, none of this will plug the billion euro gap. The federal government therefore wants to examine whether it can also suspend the debt brake in 2024. This will initially involve 2.7 billion euros in flood aid for victims of the flood disaster in the Ahr valley.
However, the federal government wants to have a suspension decision checked legally as watertight as possible beforehand. The question: Is there really an emergency situation as required by the Basic Law? The traffic light coalition also wants to talk to the CDU/CSU about whether they would support a suspension or take legal action again. The debt brake could also be suspended later in the year - namely if significantly more money is needed to support Ukraine than is currently foreseeable.
Read also:
- Year of climate records: extreme is the new normal
- Precautionary arrests show Islamist terror threat
- UN vote urges Israel to ceasefire
- SPD rules out budget resolution before the end of the year
The budgetary cuts proposed by the German federal government, as part of the Traffic light coalition's agreement, include reductions in international engagement and federal subsidies.Despite these savings and other measures, such as the abolition of tax concessions for agricultural diesel, the federal government still faces a funding gap of almost 30 billion euros, necessitating further adjustments to budgetary policy.
Germany, Traffic light coalition, budgetary policy
Source: www.ntv.de
