11.1 billion euros still separate Federal Finance Minister Christian Lindner (FDP) from his goal of pushing new debt in the draft budget for 2023 far enough to comply with the debt rule in the Basic Law again.

Just a few days ago, the gap that the FDP politician had to close was more than twice as large, at more than 25 billion euros.

Manfred Schäfers

Business correspondent in Berlin.

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According to information from the Frankfurter Allgemeine Zeitung (FAZ), after various "head-to-head talks" with his cabinet colleagues, the finance minister succeeded in reducing the need for consolidation to the value mentioned at the beginning.

At the end of next week, the federal cabinet should officially approve Lindner's figures.

Recently, the coalition partners have increasingly attempted to delay again when the debt limit will come into effect.

According to earlier calculations, the rule requires new borrowing of less than 8 billion euros next year – 139 billion euros are planned from additional loans this year.

Lindner applies the emergency brakes

Despite budgetary reserves and reserves in the energy and climate fund, this is tantamount to an emergency brake on the budget.

New projects are hardly possible there.

Lindner argues that with foreseeable economic growth of 2 percent and a noticeable increase in tax revenue, one cannot speak of an emergency in the budgetary sense.

The coalition has already taken into account the turning point associated with the Russian war of aggression in Ukraine in the key points of the draft budget.

There is no room for further spending requests.

The finance minister's task of presenting a draft budget that conforms with the constitution has been made more difficult by the significant rise in interest rates following the cabinet's benchmark decision in mid-March.

In recent years, the federal government had benefited unusually strongly from the negative yields.

He issued the paper with a zero interest coupon, and he received the difference to the usual market rate of return directly as a surcharge (agio).

This was particularly high when the federal government subsequently threw securities from its holdings with higher interest rates onto the market.

Low interest rates allowed its predecessors to benefit greatly

In the years 2020 and 2021, this premium effect accounted for almost 12 and 11 billion euros, according to an overview by the Federal Ministry of Finance, which is available to this newspaper.

This year it is just 700 million euros - and in 2023 the effect will change: the premium will become a discount of 8.5 billion euros.

The curve for interest expenditure turns upwards correspondingly steeply.

After 6.5 billion euros (2020) and almost 4 billion euros (2021), 16.3 billion euros are estimated this year.

For 2023, the Ministry of Finance expects interest payments of 30 billion euros, after which it should be between 25 and 30 billion euros a year.

The inflation-indexed bonds are particularly popular in Kontor.

The costs went "through the roof," so to speak.

After around 1 billion euros recently, it should be 4.6 billion euros this year and 7.6 billion euros next year.

In view of these figures, the Federal Ministry of Finance does not see itself as a winner from inflation.

The total interest expenditure expected for 2023 is 12.5 billion euros above the old value from the financial planning.

The plus is therefore higher than the financial gap that Lindner still has to close by July 1st.

Expensive projects are not included in Lindner's plan

It is foreseeable that the cabinet proposal will not contain any expensive items for projects from the coalition agreement (citizen's income, super depreciation, share pension).

It was still unclear how Health Minister Karl Lauterbach (SPD) should close the financial gap in the health insurance companies.

Lindner has not yet planned an increased federal subsidy, so the SPD politician is under pressure to initiate unpopular reforms or to accept higher contributions.

In addition to the federal budget, the Energy and Climate Fund (in future: Climate and Transformation Fund) is playing an increasing role.

Here, too, the registrations were recently well above what could be financed - although the coalition had significantly increased the spending framework with the controversial supplementary budget for 2021.

The gap between what is desired and what is feasible is expected to total 72 billion euros by 2026.

Lindner had recently suggested reducing subsidies for electric cars - not least with the argument that demand is greater than supply, so the state does not have to push them up with billions.

Because of the corona pandemic and most recently also because of the war in Ukraine, the debt brake was suspended in the years 2020 to 2022.

The federal debt will increase by almost 500 billion euros, the 100 billion for the Bundeswehr special fund at the end of March are not yet taken into account.

At the end of March 2022, the federal government was indebted at a good 1.5 trillion euros.

Recently, several top politicians from the SPD and the Greens have questioned compliance with the debt rule in the coming year.

"We would like to see how it is to be met with all the necessary spending," said Green Party leader Omid Nouripour.

His party friend, fraction leader Britta Haßelmann, spoke of an emergency situation in which a state had to invest in the future and remain able to act.

And the SPD chairwoman Saskia Esken demanded that the coalition talk about the debt brake or other ways of financing - knowing full well that the FDP would not consider higher debts or tax increases.