ROUNDUP: Federal budget 2024 ready – how long will the debt brake last?

BERLIN (dpa-AFX) – Under great pressure to save and after weeks of struggle, the traffic light coalition has launched the federal budget for the current year. On Thursday evening, the Bundestag’s budget committee approved a budget with spending of 476.8 billion euros and new loans amounting to around 39 billion. The debt brake should be fully effective again after years of exceptions. However, the traffic light groups made it clear on Friday that it could still be suspended under certain circumstances. Investments are reported at around 70.5 billion euros.

The pressure to save has recently been eased because Federal Finance Minister Christian Lindner (FDP), based on the original draft, was able to use more funds amounting to billions from reserves and economic development allowed for higher levels of new debt.

The Union criticized the figures as piecemeal that set wrong priorities. The AfD even declared the draft unconstitutional. From the perspective of the left, he is anti-social.

“Yesterday in the budget committee we decided on a budget that complies with the constitution,” said the budget spokesman for the SPD parliamentary group, Dennis Rohde, at the federal press conference in Berlin. In many places we had to re-prioritize and reshuffle. However, the “essential milestones” of the first budget draft have been retained. The Green budget politician Sven-Christian Kindler spoke of “painful savings”. However, some cuts that were initially considered are smaller or have been omitted entirely.

The draft budget will now go to parliamentary deliberation. The Bundestag and Bundesrat are due to make a final decision on this at the beginning of February.

The fact that the federal budget for the current year was not already dry is due to a groundbreaking ruling by the Federal Constitutional Court in mid-November. The result: billions in holes had to be plugged in the budget and in the fund for investments in climate protection and restructuring the economy.

The leaders of the SPD, Greens and FDP negotiated this for weeks – and they made highly controversial savings decisions. Consumers have to prepare for more expensive flights and higher prices for fuel and heating. The ticket tax for passenger flights as well as the CO2 price on heating oil, gas and fuel should increase and bring more money into the state coffers.

Because of the planned gradual abolition of tax relief for agricultural diesel, farmers across the country have been taking to the streets for weeks. Despite the protests, the traffic light coalition did not back down from these plans. However, she had quickly given up on any further plans. But farmers are not satisfied with this. Farmers’ President Joachim Rukwied has already threatened new, far-reaching protests from Monday. The previous protests were the “foreshock,” he warned.

A new funding program for the construction sector with a volume of one billion euros was agreed, which is intended to support the construction of small and affordable apartments, such as those needed by single parents and senior citizens. The program is extended until 2034. The support should take the form of a reduction in interest rates. The rents should be in the lower third of the rent index.

“The funding doesn’t just pour watering cans into big pockets, but rather achieves affordable living space through restrictions on rental prices,” said SPD deputy parliamentary group leader Verena Hubertz. “This is urgently necessary in times when rental prices are rising many times over in a very short space of time.”

The Federal Employment Agency is spared from having to make a subsidy of 1.5 billion euros to the federal budget this year. The reason is better annual financial statements in the 2023 federal budget, which creates financial leeway, said traffic light politicians. However, the cabinet’s decision to reduce the federal subsidy to pension insurance for 2024 to 2027 by 600 million euros remains. However, FDP budget politician Otto Fricke emphasized: “Not a single pension will be cut by this budget.” It’s just about reducing the pension insurance reserve, which is not provided for by the law at this level.

The war in Ukraine also remains a major source of uncertainty for the budget. What happens if Germany has to significantly increase its aid to Ukraine again – because developments at the front or the withdrawal of other states from the support alliance require this? The traffic light coalition reserves the right to claim an “extraordinary emergency situation” and to suspend the debt brake. He is firmly convinced that the legal framework for this exists, said SPD householder Rohde. “I think that the Ukrainian struggle for freedom should not fail in the end because of a conservative view of debt rules.”

The CDU/CSU parliamentary group’s budget spokesman, Christian Haase, called for a “completely new budget”. Because: “What we see here is a repair of the repair of the repair.” A new budget must set priorities in internal and external security as well as in stimulating the economy. The CDU politician accused the traffic light of still financing their “favorite projects”. He assumed that the traffic light would have significant problems in the budget for the coming year. Haase expected a gap of 36 billion euros.

The left-wing chairwoman Janine Wissler criticized: “It is an anti-social and unfair budget cuts without foresight.” Among other things, Wissler named sanctions for those receiving basic income, criticized the lack of climate money to compensate for the higher CO2 price and complained about cuts in humanitarian aid.

Christian Leye, the general secretary of the Sahra Wagenknecht alliance, explained: “Instead of taxing billionaires and crisis profiteers fairly or explaining to the FDP that the debt brake is a brake on investment, the traffic light is saving the country further into the crisis.”

The AfD budget politician Peter Boehringer was of the opinion that the new debt was not 39 billion euros, but 77 billion euros. The total volume of the budget is not 476 billion euros, but at least 540 billion. The budget therefore violates the constitution. “The coalition is not saving, it is only drawing from reserves and new debt,” criticized Boehringer./sk/DP/stw