Lindner expects tough budget negotiations – details about the higher defense budget are open

Berlin (Reuters) – The Federal Ministry of Finance expects the draft budget for 2025 to be difficult to prepare.

Further consolidation steps by the ministries are still necessary, it was said on Thursday in circles in the FDP-led ministry. By April 19th, the individual ministries should outline their spending wishes and also make savings suggestions. There will then be further political discussions in the traffic light government made up of the SPD, Greens and FDP until the cabinet approves the draft on July 3rd. The Bundestag should then discuss the draft from September and adopt it by the end of November 2024.

The Ministry of Finance set out the course for the 2025 federal budget and the financial plan until 2028 at an internal government meeting on Thursday. The Ministry of Finance recently spoke of a need for action in the lower double-digit billion range for the 2025 budget. The coalition must therefore raise this amount through cuts and additional revenue. According to an insider, the gap was estimated at 15 to 25 billion euros.

“Germany is facing major economic and financial policy challenges,” wrote Finance Minister Christian Lindner to federal authorities. “The medium-term growth figures are below those of previous years and there is a clear need for structural consolidation for the future financial years in the federal budget, especially after the extraordinary years of crisis.” There needs to be a normalization of spending. “It will require a concerted effort by the federal government to resolve the need for action in the federal budget.”

No specific information was provided last year regarding the medium-term financial plan until 2028. This is important because in 2028 spending for the Bundeswehr on the special fund will no longer be possible. The regular defense budget should then be significantly increased in order to be able to comply with Germany’s NATO commitments. FDP leader Lindner emphasized in his letter that the values ​​from 2027 would initially be adopted for 2028. In the further process, these should then be adjusted for special effects. This approach was agreed upon with Chancellor Olaf Scholz (SPD) and Vice-Chancellor Robert Habeck (Greens).

(Report by Christian Krämer, edited by Sabine Ehrhardt. If you have any questions, please contact our editorial team at [email protected] (for politics and the economy) or [email protected] (for companies and markets).)