The budget for 2025 is a “successful work of art,” enthused the Chancellor at the end of last week. But the decisions are not well received by many critics. Some of them are from within the party’s own ranks.
The SPD general secretary sounded almost pleading: Kevin Kühnert asked that the budget should not be discussed further until the cabinet has approved it with concrete figures on July 17. “At least until then, Berlin’s political establishment should allow itself and the people of the state a little summer break.” A pious wish.
The decisions that Olaf Scholz, Robert Habeck and Christian Lindner agreed on in 23 meetings and a total of 80 hours are already the subject of discussions just a few days later. And it is by no means just the opposition that is, by definition, raising a lot of criticism. As has long been the case with the traffic light coalition, people from within the coalition are also complaining, including dissatisfied ministers. This means that heated debates on several political issues can already be expected during the summer break and the upcoming budget discussions in the Bundestag in the fall. Five areas where things are getting stuck:
defense
Boris Pistorius gambled the highest and lost the most visibly. The defense minister had demanded a significant increase in his budget. “We are talking about an additional 6.5 to 7 billion euros for the coming year,” he said in May. In the end, it turned out to be just over a billion.
Pistorius is not happy with this. Far away from Berlin, visiting a NATO maneuver in Alaska, he gave vent to his displeasure: “I received significantly less than I had registered for,” said the minister. “That is annoying for me because I cannot then initiate certain things as quickly as the changing times and the threat situation require.” Pistorius is now hoping that a little more will come out of the further deliberations in the Bundestag.
The minister has interesting allies: Firstly, there is parliamentary group leader Rolf Mützenich, who otherwise has little to do with Pistorius’s war-readiness rhetoric. But both are united in their desire to suspend the debt brake for certain expenditures.
The other ally is the Green budget officer Sebastian Schäfer. He called the coalition leaders’ agreements a “proper basis for work” with some distance. However, in the area of defense, there are “great needs that we will take into account in the parliamentary process.” In other words: The last word has not yet been spoken here.
Tax relief for foreigners
The traffic light coalition wants to attract foreign skilled workers to Germany with tax discounts. Foreigners who take up work here will receive 30 percent of their gross salary tax-free in the first year, 20 percent in the second year and 10 percent in the third year.
This is what is stated in the so-called growth initiative that Scholz, Habeck and Lindner negotiated with the budget. Federal Labor Minister Hubertus Heil (SPD), of all people, apparently feels ignored by them. “That is one of the things I would not have written in,” he told n-tv/RTL on Tuesday.
Heil’s party colleague Bernd Rützel, chairman of the labor committee, told the Tagesspiegel that it was “problematic if different taxes had to be paid for the same work.” Green labor market politician Beate Müller-Gemmeke believes that there is “a principle of equal treatment in our labor law for good reason.”
The FDP counters: Heil’s comments “do not advance Germany as a business location at all,” said FDP budget politician Christoph Meyer. Tax incentives for highly qualified workers are now “a building block for solving the labor shortage in half of the EU.”
FDP parliamentary group vice-chairman Konstantin Kuhle even declared the planned tax rebate to be a “litmus test”. On Platform X, he asked: “Is Germany capable of sensible reforms or are good ideas that work in other countries systematically destroyed by general resentment and anti-attitude?”
Citizens’ allowance
An update to the citizen’s allowance is also intended to stimulate the economy again, especially through numerous tightening of rules. The “principle of consideration” must be strengthened again. Some comrades shudder at this, as the lines are very reminiscent of the “support and demand” mantra of the Hartz IV years.
In future, recipients of citizen’s allowance will face faster and greater cuts in their benefits if they reject job offers or violate their cooperation and reporting obligations. They will also have to accept jobs with a daily commute of three hours if the job centers are looking for a job within a 50-kilometer radius of the citizen’s allowance recipient’s place of residence.
Tougher penalties, more obligations to cooperate – in other words, more people in work and a boost for the economy?
“In the budget, we were able to prevent a clear-cut in the welfare state, that is the good news,” said SPD MP Jan Dieren to the star“The bad news: The FDP’s social destructive rage was diverted into the economic package.” The Greens also expressed considerable doubts.
Debt brake
Rolf Mützenich made it clear immediately after the budget agreement that the last word has not yet been spoken on the debt brake. “A lot of tricks” were necessary to close the billion-euro gap in the budget, grumbled the SPD parliamentary group leader. He reserved the right to make an exception to the debt brake possible through an emergency resolution.
But the fact that the debt brake remains is a point win for Finance Minister Lindner and his FDP, who did not want to budge an inch on this issue. The SPD’s puffing up? Had no consequences.
FDP parliamentary group leader Christian Dürr trusts the Chancellor: “We are now implementing what the Chancellor said some time ago.” That we have to make do with the citizens’ money. Dear SPD, listen to the Chancellor, that is probably what it should mean.
Development Assistance
The finance minister only had to mention the endless “cycle paths in Peru!” to finally declare that development aid was a victim of austerity. Lindner wanted to cut 1.3 billion from the budget of minister Svenja Schulze (SPD). If things are tight at home, why waste the money abroad? “It’s money well spent,” Schulze explains again and again. Because it’s needed in times of need, and ultimately because it protects prosperity and security. Schulze She fought – and still lost. A whole billion euros. That means a cut of almost ten percent for her small budget.
Germany was the only G7 country to have recently fulfilled the so-called ODA quota, according to which 0.7 percent of gross national income should be used for development projects. This will no longer be the case in the future. The global gap between needs and budget has already risen to a record level in 2023. The reason: the increasing number of crises and wars.
And so, just four days after the agreement, Svenja Schulze stated in the “Frankfurter Rundschau”: “We should actually be doing a lot more for the countries south of the Sahara.” And: “Anyone who finds all this so pointless can ask themselves why China and Russia are so active in Africa, Asia and Latin America.”
The minister has not only aid organizations from Misereor to Caritas or the Society for International Cooperation on her side – but also her Green cabinet colleague Annalena Baerbock.
The Foreign Minister was even supposed to forego two billion euros. She was able to prevent one billion, but savings are now to be made in the area of crisis and disaster relief. The Finance Minister has promised “that additional financial resources will be made available in the event of unforeseen humanitarian crises,” as the office says. The value of this promise will become clear when the money is demanded.
Source: Stern
I have been working in the news industry for over 6 years, first as a reporter and now as an editor. I have covered politics extensively, and my work has appeared in major newspapers and online news outlets around the world. In addition to my writing, I also contribute regularly to 24 Hours World.
