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Monday, March 20, 2023

Finances: Lindner lets ministerial colleagues fidget in the budget dispute

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The finance minister says the negotiations on the federal budget are more difficult than they have been in ten years. While he continues to play the ball, the Greens rely on relaxation through a tax plus.

In the budget dispute of the traffic light coalition, Finance Minister Christian Lindner has increased the pressure on his ministerial colleagues. The FDP politician told Welt am Sonntag that he would only make the step into the cabinet when he had a realistic draft budget. He himself does not feel any pressure to agree. “On the contrary, the colleagues must have an interest in a quick agreement, since their financially effective projects cannot be pushed forward without a budget.”

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Originally, the key figures for the 2024 budget were to be decided in the cabinet next Wednesday. However, Lindner canceled the appointment because he could not agree with his colleagues. The specialist ministers had announced additional requests of around 70 billion euros, for which the finance minister sees no leeway if the debt brake is adhered to and tax increases are avoided.

“We will have to talk about financial realities together again in the cabinet,” Lindner told the dpa. From his point of view, the negotiations have not failed, he made clear at the weekend. He would suggest to Chancellor Olaf Scholz (SPD) how to proceed, he said when asked whether the cabinet should now have a budget retreat. In 2010, the then black and yellow federal government agreed on a comprehensive austerity package.

Klingbeil: Don’t play social issues off against defense

SPD leader Lars Klingbeil called for faster resolution of conflicts in the coalition. Political disputes are part of it, “but some of these disputes take too long for me,” he said on Saturday at an SPD conference in Dortmund. At the same time, he warned against offsetting social and defense spending against each other. Lindner had previously indicated that he was not averse to increasing the budget of Defense Minister Boris Pistorius (SPD). But savings must be made elsewhere.

The Greens see the situation less critically. The tax estimate in mid-May should already bring new leeway and thus some relaxation, said housekeeper Sven-Christian Kindler to the editorial network Germany (RND). “The development is much better than expected.” The tax estimators forecast how much money the federal, state and local governments will take in from taxes each year. Despite the economic slowdown, they had recently revised their forecast upwards, with high inflation making a major contribution.

Against this background, Lindner sees less of an income problem than an expenditure problem. For a long time he has been warning of rising interest payments and high costs due to collective bargaining, which could make the federal government’s financial leeway even smaller than it already is. “We have strong income, but expenses are increasing far too quickly,” Lindner told the “Welt am Sonntag”. The budget planning for 2024 cannot be compared with any budget advice from the past ten years. “For the first time in over ten years we have to consolidate.”

Greens want to remove climate-damaging subsidies

According to the Minister of Finance, not only projects of his colleagues, but also his own projects are under scrutiny. “My projects are also subject to an overall agreement on the budget,” he said. “It’s part of fairness.” However, he advocates giving priority to everything that strengthens the economy and growth.

Green budget expert Kindler called on Lindner to cut climate-damaging subsidies in order to spend less. “Especially in times of the climate crisis, the reduction of climate-damaging subsidies would bring a double dividend: for the budget and for our livelihoods,” he told RND and the “Rheinische Post”.

The opposition Union also sees a spending problem: the additional requests of the ministers are “completely excessive”, criticized CSU General Secretary Martin Huber. The left, on the other hand, emphasized that the federal and state governments could collect and distribute almost 48 billion euros more per year if a wealth tax was levied on the super-rich, inheritance tax reformed and a sales tax levied on stock market products.

Source: Stern

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