Zoom Image

Federal Cabinet: Budget agreed, dispute likely to continue


Florian Gaertner / photothek / IMAGO

After months of wrangling, the German government has adopted its draft federal budget for 2024 and the financial plan until 2027. The submission by Finance Minister Christian Lindner (FDP) passed the cabinet on Wednesday, several news agencies reported, citing insiders. According to the draft, expenditure is expected to fall significantly to 445.7 billion euros. That is around 30 billion euros less than this year. After crisis-related additional expenditure in previous years due to the corona pandemic and the energy price crisis, an austerity course is now to be embarked upon.

New debt is expected to reach 2024.16 billion euros in 6. Lindner wants to fully exploit the scope for permissible new debt. At the same time, the debt brake enshrined in the Basic Law is to be complied with for the second year in a row.

Lindner wants to explain the details to the press in the afternoon. The finance minister sees the draft as a return to normality after several years in which the budget was inflated by hundreds of billions of euros in new debt to cope with the corona pandemic and the consequences of the Ukraine war. All ministries except the Ministry of Defense had to make savings contributions.

Despite the cabinet decision, however, the dispute has not been resolved in detail. In the case of the basic child benefit planned from 2025, for example, the traffic light coalition still has to agree by the end of August on how much money it wants to provide for this in the financial plan. Lindner has calculated two billion euros, Family Minister Lisa Paus (Greens) originally planned with twelve billion euros.

The economic plan, which regulates the expenditure of the Climate and Transformation Fund (KTF) in detail, is also still pending. This is to be used, for example, to pay the subsidy for replacing heating systems from 2024.

The Bundestag will not decide on the entire federal budget until the end of the budget week on 1 December. Until then, numerous changes in the draft budget are to be expected, which will also take into account the new tax estimate due in the autumn and an adjustment of economic expectations.