After weeks of political struggle and tough austerity decisions, the German federal budget for the current year is in place. Yesterday, the budget committee of the German Bundestag approved a budget with expenses of around 476.8 billion euros and new loans of around 39 billion euros. After years of exceptions, the debt brake should once again be fully effective – at least for now.
The Bundestag and Bundesrat are expected to make a final decision on the 2024 budget in early February. In fact, the federal budget for the current year should have been fixed a long time ago. However, a groundbreaking ruling by the German Constitutional Court in mid-November thwarted the “traffic light coalition’s” plans. The result: billions of dollars in holes had to be plugged in the budget and the fund for investments in climate protection and restructuring the economy.
Decision on agricultural diesel remains
The leaders of the SPD, the Greens and the FDP negotiated this for weeks – and made highly controversial cuts and austerity decisions. German consumers have to prepare for more expensive flights and higher fuel and heating prices. The tax on tickets for passenger flights, as well as the price of CO2 in heating oil, gas and fuel, are expected to increase and bring more money into the state's coffers.
Due to the planned gradual abolition of tax benefits for agricultural diesel, farmers across Germany have been taking to the streets for weeks. Despite the protests, the coalition did not back down from these plans in the budget committee.