Budget dispute: Habeck struggles with the tricky two H

In the heat of Bremen, Robert Habeck puts his hands on his hips. The Minister of Economic Affairs wants to draw a “small interim conclusion”. During the day, the Green politician visited people in Laatzen in Lower Saxony, in Hanover and now in Bremen.

What the people visited have in common: They either decided to get a heat pump themselves, or their landlord installed one for them. When Habeck returns from the grey-painted, unrenovated terraced house in Bremen, he has good news to announce. He says that he feels the mood has changed. All the people he meets tell positive stories. It is like a “fresh start” for the heat pump.

Habeck wants to stimulate demand

However, the turnaround is not reflected in the figures. Or at least not yet. Demand is at a low. According to figures from the Federal Association of the German Heating Industry, only 90,000 heat pumps were sold in the first half of the year, 54 percent fewer than in the same period last year. The goal formulated by the federal government of installing 500,000 heat pumps annually from 2024 is likely to be missed by a wide margin in the first year.

Also because the political agreement on the so-called “Heating Act” was difficult and the public debate about it was heated, the uncertainty is still great – and not only the law, but also the heat pump itself has fallen into disrepute.

That is exactly what Habeck wants to change. That is why he set off on a promotional tour through northern Germany on Monday. He wants to make it clear that many reservations are unfounded and that purchasing a heat pump is also financially worthwhile.

The darned second H travels with

He takes two and a half days to do this, speaking not only with owners, but also with manufacturers and tradespeople. Ensuring that the conversion to climate-neutral heating is successful is one of the Green politician’s most important concerns. After all, the Heating Act is inextricably linked to his name.

However, he cannot devote his full attention to the issue: While Habeck is trying to boost the low demand for climate-friendly heating systems, the Vice Chancellor also has to deal with a second problem that also begins with “H”: the budget – and it is pressing.

The agreement for the 2025 budget is expected to be reached by the end of the week. It is expected to be forwarded to the Bundesrat and Bundestag in good time on Friday.

The government is threatened with extinction

The only problem is that there is a hole in the budget and it is still not clear how exactly it is to be plugged.

But one thing is certain: the question of the budget is driving the traffic light coalition to its limits. After all, a government that cannot draw up a budget is essentially finished. A lot is at stake – and so this question is also on Robert Habeck’s heating tour.

At the beginning of July, everything seemed to be in agreement. After days of wrangling, Scholz, Habeck and Lindner presented an agreement. This was with the proviso that three planned measures should first be reviewed. But they were optimistic.

At the end of July, two commissioned reports were ready, prompting Finance Minister Christian Lindner to express doubts. In response, the SPD accused Lindner of unilaterally revoking the budget compromise that had been reached.

Scholz speaks with authority

A dispute lasting several days followed. SPD party leader Saskia Esken felt that Lindner had exceeded “the limits of what is tolerable in a coalition”, while FDP general secretary Bijan Djir-Sarai accused the SPD and the Greens of “debt populism”.

The Chancellor, who was on vacation, let the dispute run its course before speaking out with an unusually clear swipe at the Finance Minister: It remains a “mystery how the actually clear opinion of the legal opinion could temporarily be interpreted in a fundamentally wrong way.”

So everything is clear? Not at all! And so Scholz, Habeck and Lindner are currently struggling to find a solution that everyone can live with.

Linder has already drawn red lines as a precaution. He said in an interview that he would no longer enter into a budget with legal risks: “That won’t happen to me a second time.” He was referring to the fact that the budget for 2024 was overturned by the Federal Constitutional Court.

“That was really for the feet”

The Greens had largely held back in the public debate about the budget. On his heating tour, Habeck used the media attention to say a few sanctimonious words.

Millions of Germans who get up in the morning and do their work rightly expect the same from the government, he said during a visit to the heat pump manufacturer Stiebel Eltron in Holzminden, Lower Saxony: “Doing the work does not mean publicly blathering on about everything that is not working and not seeing it as work.” The last few days have therefore been “really tough”.

Habeck wouldn’t be Habeck if he didn’t add a little bit of confidence to the gentle self-criticism of the traffic light coalition. “We’ll manage to get the budget sorted,” he says. It sounds a bit like expedient optimism.

He does not want to reveal how many telephone calls he has had with Lindner and Scholz. And when a journalist asks him whether he has already put the champagne on ice for an agreement, he brushes it off: “That is work, not something to celebrate.” No one should drink to that, he says, but it is a craft that has to be done well. The situation is serious, and that probably means that.

When Habeck completed his last appointment of the day on Tuesday at the municipal utility company in Norderstedt, Schleswig-Holstein, he was actually already standing right in front of the bus that he was supposed to board with the press representatives. But he quickly left again. “I’m just going to check my cell phone,” he said. “For good reason.” This heating tour would not be possible without household chores.