Traffic light agreement on the budget draws closer
Weeks-long dispute between Scholz, Habeck and Lindner seems to have resulted in an agreement on the budget 2025. According to a media report, the financing gap of 25 billion Euro has shrunk to ten billion Euro. This was partly due to unexpected additional revenues in the budget.
German Chancellor Olaf Scholz from the SPD, Economy Minister Robert Habeck from the Greens, and Finance Minister and FDP leader Christian Lindner have reportedly made significant progress in their negotiations on the budget for 2025. The initial financing gap of 25 billion Euro plus additional expenses from some ministries has been significantly reduced to below ten billion Euro, according to "Spiegel" magazine, citing coalition circles.
Moreover, some accounting changes have contributed to this. The magazine reports that zinc payments in the coming year are expected to be up to six billion Euro lower, among other reasons, because the European Central Bank (ECB) has lowered interest rates. The coalition also plans to use excessive privatization revenues of four billion Euro, which will be available in the coming year.
There have been disputes in the German government for months due to tight budgets and the weak economy regarding the budget for the coming year. Besides the debt brake, issues such as the height of social benefits, infrastructure investments, as well as expenditures for defense and development projects are contentious. Finance Minister Lindner demanded significant cuts in the budgets of several ministries, especially in social spending.
"Setting priorities"
FDP parliamentary group leader Christian Dürr told the "Rheinische Post": "The most important thing is to set priorities. We cannot fulfill all our wishes with money from the budget." There is no alternative to "financing everything with debt." Two-thirds of the ministries have already set up their budgets for 2025 and adhered to the guidelines. "The rest will follow, I'm sure."
The traffic light coalition originally wanted to pass the budget in their cabinet meeting next Wednesday, so that the consultations in the Bundestag could begin after the summer break. The latest talk was only about an agreement "in July."
The traffic light coalition, comprising Olaf Scholz from the SPD, Robert Habeck from the Greens, and Christian Lindner from the FDP, has reached a significant agreement on the budget for 2025. This agreement has resulted in a reduction of the initial financing gap of 25 billion Euro to below ten billion Euro, partly due to unexpected additional revenues and accounting changes. Robert Habeck and Christian Lindner, in their roles as German Chancellor and Finance Minister respectively, have played crucial roles in these negotiations, overcoming weeks-long disputes.
