Budget dispute: Traffic light coalition seeks solution to financing gap

The federal government wants to have a revised plan for the 2025 budget by the next cabinet meeting on August 14 – but discussions about this in the next few days could be difficult. Deputy government spokesman Wolfgang Büchner said in Berlin that he had nothing to report about a specifically planned personal meeting between Chancellor Olaf Scholz (SPD), Finance Minister Christian Lindner (FDP) and Vice Chancellor Robert Habeck (Greens). However, the Chancellor and his cabinet colleagues are able to coordinate at any time, including by telephone. “In any case, everyone is of good will and optimistic that everything can be resolved well in the end,” he added.

Lindner had previously made public that experts see constitutional and economic risks in some of the federal government’s plans, for example the idea of ​​using the remaining 4.9 billion euros from the KfW development bank for the gas price caps for other purposes in the budget. The plan to pay loans instead of subsidies to the motorway company could also be problematic.

Accordingly, the budget would have to be renegotiated, said Lindner. Criticism followed, particularly from the SPD, that the Federal Finance Minister had not first sought an internal discussion on the matter.

Lindner rules out tax increases

On the sidelines of a citizens’ dialogue in Potsdam on Monday, Lindner reiterated where the red lines lie for the FDP. He said: “There is no option to increase taxes for the work of the population and businesses, but on the contrary: We should stick to the goals of broad relief.” Making emergency decisions on the debt brake is also not an option.

SPD leader Saskia Esken said on the ARD and ZDF morning show: “He speaks of transparency, but he has not created transparency within the government, but with the public. That is indecent and it serves to raise his own profile.” Lindner is thus once again damaging the government. Scholz, Lindner and Habeck will talk to each other, find a solution by August 14 and then submit the draft budget to parliament, she said.

FDP parliamentary group leader Christian Dürr stressed on Deutschlandfunk: “The basic outlines of the budget are in place.” The budget for the coming year, at 480 billion euros, is significantly larger than the gap of five billion euros.

Union expects significantly larger financing gap

On Sunday, the Federal Minister of Finance estimated the financing gap at around five billion euros. The Union expressed doubts about this. The financing gap is “larger than the five billion euros claimed by Christian Lindner,” said parliamentary group vice-chair Mathias Middelberg (CDU) to the German Press Agency. “In fact, of the outstanding 17 billion euros, after deducting a capital increase at Deutsche Bahn of up to 3.6 billion euros, 13.4 billion euros still need to be financed,” he calculated.

Lindner’s expectation that eight to nine billion euros would not be spent is unrealistic. In view of the current shrinking economic development, rising expenditure is to be expected, especially in the social sector. This is already shown by the draft for the 2024 supplementary budget. There, 3.7 billion euros alone are earmarked for “massively increasing expenditure on citizens’ income,” said Middelberg.

The deputy chairman of the Union faction accused the coalition partners of destroying the confidence of consumers and private investors with the uncertainty they had caused with regard to the budget, funding programs and public investments. He said: “If the traffic light coalition does not end its quarrel very quickly and credibly, the collapse of the German economy will really gain momentum.”

When Scholz, Federal Minister of Economics Robert Habeck (Greens) and Lindner presented the budget a month ago, it was publicly stated that there were these requests for an audit to the Finance Ministry, said FDP parliamentary group leader Dürr, obviously trying to refute the criticism of Lindner.

Kühnert accuses Lindner of bad style

The results should have been discussed internally, said SPD General Secretary Kevin Kühnert to the TV station Phoenix. “This can only be described as bad form.” If a government jointly initiates an audit, the results must first be discussed with colleagues in the federal government. Lindner obviously wants to lead a “public contest of interpretation” about the welfare state in Germany.

After an initial review of the reports last week, the Federal Ministry of Finance said that “measures to ensure the accuracy of social spending, on which no political agreement has yet been reached, could also reduce the need for action.”