“Further talks needed”
Budget dispute threatens to drag on
03/13/2023 3:16 p.m
Apparently, the traffic light in the budget dispute will not agree for the time being. Further discussions are necessary on the part of the FDP, especially with a view to the question of what is financially possible. After all: According to financial experts, the scope for the next few years could be greater than expected.
In the budget dispute between the federal government, there is apparently no quick agreement in sight. It was “not done with small measures,” said Finance State Secretary Florian Toncar on Deutschlandfunk. More detailed discussions are needed, because “in fact we have to talk about what we can afford in the next few years.” According to financial expert Jens Boysen-Hogrefe, the federal government can hope that the budget for 2024 and the financial planning up to 2027 will bring relief in May.
“Nominal gross domestic product expanded surprisingly strongly in the final quarter of 2022,” said Boysen-Hogrefe. “In addition, there was good news from the labor market, and there are increasing signs of significantly rising wages. This speaks for an increase in many forecast variables relevant to the tax estimate compared to the tax estimate from autumn 2022.” The financial expert from the Kiel Institute for the World Economy is a member of the federal, state and local government tax estimate working group, which will be preparing the new estimate from May 9th to 11th.
The cabinet wants to launch the draft for the 2024 budget and the financial planning on June 21. In recent years, it has been customary for the government to agree on benchmark figures in March for how much money each ministry has at its disposal. Finance Minister Christian Lindner (FDP) canceled the benchmark resolution planned for March 15 without a new date last week because there was still no agreement. Toncar now pointed out that such a decision is helpful, but not mandatory. “That helps everyone involved,” said the FDP politician. “But it’s also not required by law that there has to be something like that.” It is “of course not the case that the process as a whole would be in danger”.
An exchange of letters escalated the dispute
In the Ministry of Finance it was said that a benchmark decision was only possible by mutual agreement. The budget dispute had previously escalated in an exchange of letters between Economics Minister Robert Habeck and Lindner. Habeck had opposed public pre-determinations for an increase in the defense budget and questioned the financial planning as a whole.
The Greens insist that the budget should be set in favor of the basic child security planned from 2025. Lindner, in turn, has made it clear that he wants to increase the deposits for the stock pension favored by his party. From Lindner’s point of view, the debt brake should be observed in any case. The scope for new debt was estimated at around 15 billion euros at the beginning of the year.