The German government’s budget has been in the spotlight for quite some time now, with various negative headlines. Last year, a ruling by the Federal Constitutional Court put pressure on the government.

The judges in Karlsruhe struck down 60 billion euros from the Climate and Transformation Fund, as the money was originally intended to tackle the corona crisis and could not simply be used for another purpose.

In addition, Lindner’s plans did not align with the ideas of some ministries. The Finance Minister was unable to smooth things over during budget negotiations, and in the end, the Chancellor had to make a decisive statement – a first!

This year, planned cuts to agriculture caused anger. The government not only faced boos, but also found itself on the receiving end of some manure being dumped on the streets of Berlin.

Now, the budget for 2024 has been approved. Does all’s well that ends well? That would be too optimistic, as many problems were not solved but simply postponed to an uncertain future.

Higher spending than originally planned Despite cost-cutting talks and the ruling of the Federal Constitutional Court, the budget ultimately exceeded the government’s initial proposal. Instead of 445 billion euros, the budget is now estimated at nearly 477 billion euros. In addition, the new debt will increase to around 39 billion euros, which is also more than originally planned. However, the debt brake will be adhered to, as limited borrowing is allowed during economic downturns.

In addition, there are „neutral projects“ that do not affect the debt brake. This includes the stock market pension, for which the government plans to allocate twelve billion euros. The project is considered neutral because the corresponding debt is offset by the capital stock. However, it still results in debt.

Reserves provided some relief this year Finance Minister Lindner ultimately had some room to maneuver in the budget due to the fact that the preliminary budget for the previous year showed a surplus of over six billion euros. This can now be used to finance aid for the victims of the Ahr Valley flood, as well as subsidies for climate-neutral housing construction. In addition, the Federal Employment Agency will not have to repay any subsidies from the corona period, a demand that was heavily criticized. The opposition accused the government of abusing social security as a „self-service store.“

You may be wondering if the previous budget dispute was even necessary. There don’t seem to be any significant cuts. Even budget politicians struggle to answer where savings could be found. They vaguely explain that some ministries did have to make cuts. In addition, the climate fund and the citizen’s income were affected by cuts due to stricter sanctions.

Will the budget hole be even bigger next year? The fact is: the budget for next year will be a major challenge. According to tagesschau.de, CDU budget politician Christian Haase expects a 36 billion euro hole. Will Lindner be able to keep his promise of not raising taxes?

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