The traffic light government wants to comply with the debt brake next year – at least for now. The announcement was made by Chancellor Olaf Scholz (SPD), Economy Minister Robert Habeck (Greens) and Finance Minister Christian Lindner (FDP) at a joint press conference. To achieve the goals, you need to survive with very less money. Scholz, Lindner and Habeck announced savings.
“We don’t like doing this, but it’s necessary,” Scholz said. Scholz mentioned this as the first point Reducing climate-damaging subsidies. According to Finance Minister Lindner, this should yield three billion euros. Also the CO₂ price for refueling and heating should go up. The planned billion dollars Subsidy for electricity grid charges should also be deleted. Heating, refueling and electricity are expected to become significantly more expensive.
There are also savings Climate and Transformation Fund, from which the conversion to a climate-friendly economy will be financed. The pot remains in force, but is expected to be reduced by twelve billion euros.
Finance Minister Lindner assured that it would be no cuts to “social standards” will give. However, he indicated that the welfare state wanted to become more efficient. They want to save 1.5 billion euros by integrating refugees from Ukraine into the job market. Also announced The doubling of military aid to Ukraine remains. The eight billion euros will be anchored in the 2024 budget.
Disasters caused by floods or the situation in Ukraine could justify a new emergency situation
However, the traffic light explicitly keeps the back doors open in the budget, which the debt brake law allows them to do: in emergencies such as the flood catastrophe in the Ahr Valley in 2022, debts will be taken on above the brake. The situation will also be re-evaluated if the situation on the frontline in Ukraine worsens. The same should apply to the scenario if other major donors to the country cease to exist – such as the USA.
In his government statement, Scholz also explicitly blames the Bundestag. If the government comes to the conclusion that it needs to reassess the budgetary situation and declare an emergency, an override resolution will be introduced in parliament.
On Tuesday morning it became clear: after tough negotiations, the traffic light leaders reached an agreement on the federal budget for 2024. The negotiations were complicated because, according to Finance Minister Lindner, 17 billion euros were missing. Lindner said: “This coalition is capable of acting and reaching agreement, even on very difficult tasks.” Chancellor Scholz also praised the discussions as constructive and family-friendly.
When preparing the budget for 2024, emphasis was placed on how it should be adjusted following the Federal Constitutional Court's decision on budget management and special funds. The main point of contention was the question of whether, in addition to budget savings, the debt brake should also be suspended for 2024.