Traffic light budget chaos: these four scenarios are now possible

Scenario 1: We can do it

Time is running out - Traffic light budget chaos: these four scenarios are now possible

How many nights does the night last? It doesn't matter, the power center of the traffic light will pull through until an agreement is reached. Because everyone is clear: failure is not an option, the budget for 2024 must be achieved before Christmas. The loss of reputation would be too great for the coalition, whose image is already tarnished, and the uncertainty in the country and in the economy would be too great. And proposing a solution even later would be too risky.

On Saturday, Chancellor Olaf Scholz will speak at the SPD federal party conference in Berlin. What if he is unable to present his impatient comrades with anything other than new empty words of confidence? The Chancellor would be in need of an explanation, problematic proposals could limit his room for negotiation. With the result that the tough talks would become even tougher.

So the leaders of the coalition jump over their respective shadows. The SPD shrinks the increase in citizens' benefits. The Greens postpone the basic protection for children. And the FDP clears the way for a suspension of the debt brake. These are painful compromises, but they send a clear message: we're rocking it, the situation is too serious for red lines and party constraints. The coalition is capable of working.

This is how Scholz, Vice-Chancellor Robert Habeck (Greens) and Finance Minister Lindner (FDP) will frame it at their joint press conference. They will stand side by side in front of the microphones and cameras in the Chancellery, just as they did after the defeat in Karlsruhe almost four weeks ago. There, they present a roadmap on how the 2024 budget can be passed this year: The cabinet approves the plans by way of circulation, the Bundestag and Bundesrat hold special sessions shortly before Christmas. Annoying, but: the budget with a bow is in place.

Scenario 2: We can no longer get it done

Scholz, Lindner and Habeck sit together non-stop, but despite their best efforts, they realize that nothing will happen before Christmas. The political differences are too great for a quick solution to be found. What's more, the agreement must be legally sound. If the new plans end up before the Constitutional Court again, it would be disastrous. So the trio is postponing further consultations until January.

In order to at least send a signal of reassurance, the three politicians stand in front of the cameras in the Reichstag. Scholz speaks of "very, very good" consultations, saying that nobody should worry, the coalition is fully capable of acting. Despite everything, "progress has already been made", says Habeck. "Great financial skills are now required," says Lindner. Merry Christmas.

But it is now clear to everyone in the coalition that the postponement is politically disastrous. A government that cannot even reach an agreement in principle on the budget in a major crisis is actually finished. The coalition is only starting 2024 with a provisional budget and every expenditure must now be personally approved by the Minister of Finance. Nobody really knows how to govern smoothly. But nobody wants new elections either. Two things are now welding the coalition partners together: The fear of an AfD election victory. And the realization that the Germans have already experienced so many existential crises with this federal government that one more or less is no longer important. And at least the year ends on a positive note: the cabinet is spared an embarrassing New Year's Eve video like last year. Christine Lambrecht is no longer there.

Scenario 3: We won't get it right, but at least...

At some point during the course of this week, the three top negotiators in the traffic lights come to the realization that we can no longer do it. However, the three chief negotiators - Minister of State Wolfgang Schmidt (Chancellery), State Secretary Stefen Saebisch (Finance) and State Secretary Anja Hajduk (Economics) - have come up with a "very, very good solution" (Scholz). The only problem: unfortunately, it cannot be fully implemented this year - not in all details, not in all procedural steps and certainly not as legally secure as it needs to be in order to avoid being sidelined again by the Constitutional Court.

But the three coalition partners are absolutely certain of one thing: they won't be able to get away with just saying phrases from the political poetry album this close to Christmas. The situation is now far too muddled for that. What is needed is at least a clear direction, a clear signal that the traffic light coalition is still capable of acting. What is needed: a fundamental decision!

There are at least three to choose from:

Germany tightens its belt! In a budget of around half a billion euros, it is always possible to make single-digit percentage cuts - and that is exactly what we are going to do now: Save, save, save. (Please insert 1-3 specific items here!)
The situation is serious, we are taking it seriously! Because of (please insert: Ukraine, recession, dilapidated bridges, climate crisis), we will also declare a budget emergency for 2024. We are not doing this lightly. And we will do so on one clear condition: we will keep our debt levels moderate and only take out as much additional credit as a reformed debt brake would allow us to.
We are modernizing the German budget! Together with the CDU/CSU, this government in a coalition of democrats will anchor a special fund for Germany 300 in the Basic Law. Its sole purpose is to make our country completely climate-neutral by 2040.

We will clarify all the details in the course of January. And now we wish everyone a Merry Advent!

Scenario 4: The liberation blow

No, there is no more white smoke rising from the Chancellery this year, plunging the coalition into major turmoil just before Christmas. The SPD in particular is losing patience, accusing the Finance Minister of taking the entire government "hostage" with his debt brake mantra. But the three negotiators remain calm. What only they know is that they are not working on an emergency solution that will somehow plug the billion-euro hole with a multitude of small and medium-sized savings. They want a major solution that includes the largest opposition party.

Friedrich Merz, the CDU leader, is already involved in some of the talks. The core of the idea is to create a new source of money: a special fund for the transformation along the lines of the fund for the Bundeswehr. Lavishly endowed, anchored in the Basic Law with a two-thirds majority and thus immune to a lawsuit in Karlsruhe. A quote from the Minister of Finance from the negotiations is circulating: "This crisis is also an opportunity." The traffic light coalition wants to change course and finally keep its promise to turn the state around with a construction offensive, a major modernization plan for transport and infrastructure and new targets for the expansion of wind energy. Greener, faster, more efficient. The chancellor's office is already raving about a kind of "New Deal".

The problem: every day that passes without a concrete announcement damages the coalition. But no one can give any details yet. Scholz, Habeck and Lindner need time. The question now is: will the three of them manage it - or will someone lose patience first?

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In Scenario 1, Finance Minister Christian Lindner from the FDP plays a crucial role in clearing the way for a suspension of the debt brake to help the coalition achieve the budget for 2024 before Christmas. In Scenario 2, Chancellor Olaf Scholz, Vice-Chancellor Robert Habeck (Green Party), and Finance Minister Lindner realize that a solution cannot be reached before Christmas due to political differences and legal constraints, leading them to postpone further consultations until January. In Scenario 3, the top negotiators from the coalition recognize that they cannot meet the deadline and are searching for a 'very, very good solution,' which, unfortunately, cannot be fully implemented this year.

Source: www.stern.de