– by Holger Hansen
Berlin (Reuters) – In the struggle to finance the 2024 federal budget, the traffic light coalition can record an unexpected windfall.
The federal government is entering the new year with 6.3 billion euros more in reserves, as the Ministry of Finance announced on Tuesday with the preliminary budget statements for 2023. “The funds will help finance additional burdens in the 2024 federal budget,” the ministry said. No details were given. However, parts of the traffic light coalition expected that this would also secure the financing of the 2021 flood relief for the Ahr Valley amounting to around 2.7 billion. A suspension of the debt brake for 2024 for this reason is probably not necessary.
This means that the federal government can draw on a reserve of around 10.7 billion euros in 2024, of which 4.4 billion euros were previously planned. At the end of 2022, there were still 48.2 billion euros in the so-called asylum reserve, which had been accumulated after the refugee immigration in 2015. Of this, around 37.5 billion euros were used to finance the budget in 2023.
MINISTRY: STRUCTURAL ADJUSTMENTS NEEDED
The higher reserve should make the budget discussions for 2024 easier, which will enter the final phase on Thursday with the adjustment meeting of the Bundestag’s budget committee. There was initially no comment from the coalition as to whether this might also create scope to accommodate farmers with the planned cuts in agricultural diesel. The Ministry of Finance indirectly warned against covetousness and pointed out the need for structural savings. “The lower withdrawal from the reserve in 2023 can make a contribution to consolidating the federal budget in 2024,” the ministry explained. “In the medium and long term, however, structural adjustments will be necessary.”
“We have to prioritize spending more than before,” explained Federal Finance Minister Christian Lindner. “We will have to work harder to find financial flexibility in the future.” He pointed out that the 2023 budget had reduced new debt by two thirds compared to the previous year.
The FDP leader was obviously only referring to the core budget, for which the ministry put the net new debt at 27.2 billion euros after 115.4 billion euros in 2022. In addition, there are around 44.8 billion euros in new loans that the Bundestag decided on in the supplementary budget for 2023, primarily for the processing of the WSF crisis fund. In December, the debt brake was suspended for the fourth year in a row in 2023.
According to the ministry announcement, 457.7 billion euros were spent in 2023, 3.5 billion euros less than assumed in the supplementary budget. In addition, administrative and coin revenue was a good three billion euros above plan. Of the planned investments of 61.1 billion euros, around 55 billion euros, or around 90 percent, flowed out. Nevertheless, in 2023 “the highest nominal amount of investments was made in one year so far”.
(edited by Birgit Mittwollen. If you have any questions, please contact our editorial team at [email protected] (for politics and economics) or [email protected] (for companies and markets).)