After lengthy negotiations, the leaders of the German coalition government have reached a breakthrough on the 2025 budget and the growth package. That is why the coalition wants to stick to the debt brake in the coming year…
The German Press Agency learned this from coalition circles after consultations with Chancellor Olaf Scholz (SPD), Finance Minister Christian Lindner (FDP) and Economics Minister Robert Habeck (Greens). The coalition leaders have been in intensive talks since Thursday afternoon. At 7:00, the parliamentary groups of the SPD and the Greens will meet for meetings.
Scholz, Habeck and Lindner had negotiated extensively in recent weeks. They had actually wanted to reach an agreement on Wednesday. The cabinet decision will now be discussed on 17 July. In order to meet this deadline, an early agreement in principle was necessary, because the drafting of the budget law usually takes about ten days. From mid-September, the Bundestag will discuss the draft budget, which could be decided on in November or December.
Individual departments such as the Foreign Office and the Development Ministry initially refused to accept Lindner’s austerity targets in view of international obligations. The social budget was also controversial. In addition, there was a gap of around 10 billion euros that had to be filled. In view of the financial burden caused by the war in Ukraine, the SPD in particular insisted on suspending the debt brake again in order to create more room for investment. For Lindner’s FDP, this was out of the question. The SPD rejected cuts in the social budget.
Only minimal growth is expected in Germany
This year, only minimal growth is expected in Germany. Companies are holding back on their investments and private consumption is also not picking up. Trade associations have long complained about location-related disadvantages, such as high taxes and levies, a lack of skilled workers and too much bureaucracy.
Here the government wants to start with the ‘growth turbo’. Scholz had already said that the federal government wanted to promote private investment. He held out the prospect of better tax depreciation for companies. In addition, it must be made easier for parents to work and the incentives to work must be increased, also in the area of taxation.
Source: Krone
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