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German Finance Minister remains firm on budget restriction for 2025
(Bloomberg) — German Finance Minister Christian Lindner will not give in to calls from some of his cabinet colleagues for more money in next year’s budget and will stick firmly to his goal of imposing strict debt rules, according to one of his deputies.
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Defense Minister Boris Pistorius, Foreign Minister Annalena Baerbock and Labor Minister Hubertus Heil, among others, asked Lindner for more money. However, her scope to meet her demands is limited by weaker-than-expected tax revenue projections and her determination to maintain the so-called debt brake enshrined in Germany’s Constitution.
Both Social Democratic Chancellor Olaf Scholz and the Greens’ Robert Habeck, the deputy chancellor and economy minister, have publicly backed Lindner, who leads the fiscally aggressive Free Democrats, the smallest member of the three-party ruling alliance.
“The chancellor has stressed that he intends to comply with the requirements of our Constitution,” said Florian Toncar, the parliamentary secretary of state who is effectively Lindner’s number two, in an interview with Bloomberg Television in Frankfurt on Tuesday. “The Ministry of Finance is really working hard on this.”
Read more: Germany prepares 7 billion euro tax package to support the economy
Lindner aims for next year’s budget to be approved by the cabinet in early July, before being sent to parliament in mid-August.
It is then expected to gain support by the end of the year from lawmakers in both the Lower House, or Bundestag, and the Upper House of the Bundesrat, where the 16 federal states are represented.
Pistorius is the only minister excluded from Lindner’s savings campaign. This will allow Germany to fulfill Scholz’s promise to meet NATO’s goal of spending at least 2% of gross domestic product on the military in the long term.
Habeck was quoted as saying Wednesday that while some of the requests for additional funds are “often well justified,” the government needs to set priorities.
“As you cannot simply print money at will, we have to make cuts in other areas,” he told the Rheinische Post newspaper.
Referring to farmers’ protests earlier this year over the government’s plan to eliminate diesel subsidies, he added: “And of course we have to do this carefully – last time even small cuts led to big protests.”
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