One week after the disastrous results of the traffic light parties in the European elections, the debate over the future budget policy of the federal government is coming to a head. While the SPD and the Greens spoke out at the weekend in favor of more state investment in the economy and infrastructure and want to take out new loans for this purpose, the FDP pointed out that the legal situation alone prohibits additional debt.
She called for spending cuts in the budget of the Federal Ministry of Labour and Social Affairs. There are also different opinions within the Union. The AfD called on the Chancellor to clear the way for new elections.
Officially, the heads of the federal government still have two and a half weeks to agree on a draft budget for 2025. The budget is to be presented at the cabinet meeting on July 3. However, there are voices within the traffic light coalition who believe it would be sufficient if the draft budget was ready “at the end of July”. An extension that would probably be convenient for the coalition leadership around Chancellor Olaf Scholz (SPD), Vice Chancellor Robert Habeck (Greens) and Finance Minister Christian Lindner (FDP). The three met on Sunday for confidential consultations.
So far, the sums of planned income and expenditure projects of the various federal ministries still differ by a double-digit billion sum. SPD leader Lars Klingbeil recently said that 30 to 40 billion euros would have to be saved in order to plug the budget gap for 2025. For Klingbeil and the SPD parliamentary group in the Bundestag, this is an impossibility.
Achim Post, deputy parliamentary group leader of the Social Democrats, stressed in response to a request from WELT: “We need investments in internal security, i.e. strengthening our police and security authorities, an efficient armed forces and strengthening social security. This includes investments in stable pensions, good health care and the fight against child poverty.” Post announced that he would “examine all avenues to mobilize more financial resources.”
The creation of special funds, as recently called for by the Federation of German Industries (BDI), is also a possible way forward. “We must not hastily remove options from the table, but must now demonstrate democratic action and future viability in the face of war and crises,” said Post. The deputy parliamentary group leader of the Greens, Andreas Audretsch, expressed similar views. Like BDI head Sigfried Russwurm, Audretsch called for “hundreds of billions of euros to be invested in Germany’s future.” “The worst thing would be a tough austerity policy against all warning voices from business and society.”
In contrast, the budgetary spokesman for the FDP parliamentary group, Otto Fricke, rejected the special fund for economic investments proposed by the BDI, citing the legal situation. “A new special fund that complies with the constitution would require a two-thirds vote in the Bundestag and Bundesrat. I cannot see the necessary majorities in either chamber,” said Fricke. In terms of content, state investments and special funds are also being overestimated in the current debate, as they only have a “long-term and sluggish” effect.
Fricke cited the Municipal Investment Promotion Fund and the Digital Pact for Schools as examples, where some of the money available was not being used. According to Fricke, the federal budget gap is due, among other things, to additional spending on the budget of the Federal Ministry of Labor and Social Affairs (BMAS) and interest costs on national debt. “We must instead look at how we can curb the permanent, disproportionate increase in spending at the BMAS in order to have more leeway for our future,” said Fricke, referring to the budget negotiations of the traffic light coalition.
There are also different views on the issue of debt within the Union. While Schleswig-Holstein’s Prime Minister Daniel Günther (CDU) welcomed the BDI’s calls for a special fund for economic investments in the WELT AM SONNTAG newspaper, Christian Haase, the budget policy spokesman for the Union parliamentary group in the Bundestag, rejected the proposal.
“Setting up further special funds is nothing other than taking on even more debt outside the federal budget,” said Haase, calling instead for “more sense of reality and healthy pragmatism.” This includes, among other things, removing “wrong incentives in the citizen’s income.” “The Chancellor and the traffic light coalition with their policies are the real problem. Special funds are no help here,” said Haase.
AfD leader Alice Weidel also rejects the idea of taking out additional loans. She called on the traffic light coalition to cut “questionable spending” from the budget. This includes “climate protection and transformation programs as well as senseless development aid projects and the billion-dollar support of illegal migrants.” In any case, the government only has the support of a third of the population, said Weidel. “Olaf Scholz should clear the way for new elections.”