The endgame of the traffic lights has begun

by times news cr

After the tax estimate, the final struggle over the ‍budget begins in ​the ‌Bundestag. ⁣This is about ‌a financial hole that no one really⁢ knows how big it​ really ⁢is.

Christian ⁤Lindner (FDP) makes an effort to look ‌serious ‍as he appears​ in front of the cameras. After​ all, he brought ‍some⁤ serious news. “The‌ most important message first,” he says, ⁣”there‍ is no scope for distribution policy.” The Finance Minister has been seeing it for some time‍ now, and​ savings ⁢have to be made. And this ⁢Thursday​ he sees ⁢himself confirmed ‍once again.

Lindner‍ is ​currently in Washington DC at the fall meeting of the International Monetary Fund, the IMF. 6,710 kilometers as the crow flies separate the finance minister from ‌his official residence near Potsdamer Platz. What’s actually going‌ on across the Atlantic‍ is major financial⁤ policy and‍ the ⁢state of the global ⁤economy.⁢ The fact​ that he still ⁣connects from America⁤ to Germany via⁤ video has ‌to do ⁣with a number, or more precisely: with a sum that will‌ keep⁤ political Berlin busy in⁣ the⁢ coming‌ weeks.

982​ billion ⁢euros. According to experts’ estimates, this is how much tax money the federal government,⁣ states and municipalities are likely to collect next year. ‌Lot of money. But a little‍ less ⁢than originally⁤ hoped. 995 billion were ⁢expected in the summer. The state’s ‌financial⁢ situation is getting ​worse. Just how ⁤much? And how much pressure‍ to save​ is there really? The​ SPD, Greens and FDP will ⁣continue ⁢to argue about‍ this in the⁣ next few ⁣weeks when they prepare the⁤ budget‌ for ​2025 in the Bundestag. It’s already starting.

The question of‌ how big the hole​ is⁤ in next‍ year’s budget is ‌not that easy to answer. ⁢On⁤ Thursday, Lindner first tried a very large ⁤number: the ⁢“need for action” for 2025 is 13.5 billion euros.⁤ That sounds like a lot, and ⁤probably not by chance. The finance minister wants‍ to urge the ⁤coalition to be disciplined; that is ‍his job.

The number is ‌intended to support his ‌conclusion. And that reads: ‍“New spending requests cannot be fulfilled.” And: In order ‌for ‌the calculation to work, the legislative⁢ package that​ is intended ⁤to stimulate the ‌economy must definitely ⁢come.

But the situation is ‌not quite as dramatic⁢ as the 13.5 ⁣billion euros would suggest. Among other things, because the state is now allowed ‍to take ‌out higher loans

If that were to happen, the current hole in the budget ‌would initially only grow by around 1.6 billion euros. That would add up to around⁣ 2.4 billion euros, i.e. the amount by which ‌the traffic light wants⁢ to reduce the previously ‍unusually large global underspending. ‍This is the amount‌ that experience shows is not spent in the end.

According to the‍ tax estimate, the traffic light would now ⁤have to ⁣save around 4 ‍billion euros instead⁢ of the previously thought 2.4 billion euros. However, a few billion‌ more could be added in the next few weeks, and that is also true.​ Only then will it be clearer how​ much money ‍is actually spent on ⁤citizens’ money‍ and on ⁤compensating for the EEG surcharge.

At the end, Christian Lindner speaks of a “single-digit ⁤billion amount as a need ⁣for​ action, but it​ is closer to ten than to⁤ one.”

So‌ dramatic? Lindner’s coalition partners are ⁤comparatively relaxed in their initial reactions. The Greens’ budget spokesman, Sven-Christian Kindler, said ‌the results showed “that we need new economic and social stimulus.” The challenges for the federal budget are “nevertheless manageable”.

They​ see it similarly with ⁣the SPD. The responsible parliamentary group vice-president, Achim Post, said that the⁤ estimate would ​now ‌of course be included in the discussions. “However, the budget ⁣negotiations ⁣will ‌not be faced with insoluble tasks,⁤ also since the economic ​component of‍ the debt rule allows for higher borrowing to stimulate the economy.”

Interview: The Budget Conundrum ⁣in Germany

Time.news Editor: Welcome,‍ and thank you for joining us today. We’re thrilled to‍ have Dr. Lena Braun, an expert in fiscal policy and economic analysis, present⁣ to ​discuss the current challenges facing Germany’s budget for the upcoming year. Dr. ⁢Braun, ​let’s dive right in—what’s your take on the situation revealed by Finance⁢ Minister Christian‌ Lindner regarding the 2025 budget?

Dr. Lena⁤ Braun: Thank you for having me! It’s ⁢a‍ complex scenario. Minister Lindner has laid out a troubling picture with the projected revenues dropping to 982 billion euros—less than ⁤what was initially anticipated. This indicates a tightening⁤ financial ⁢landscape and the necessity for serious fiscal discipline among coalition partners.

Editor: Indeed, he ‌mentioned the “need​ for action” at 13.5 billion euros. What ⁢does that number ⁣signify for the coalition government, particularly the SPD, ⁤Greens,⁢ and FDP?

Dr. Braun: That figure serves⁢ as ‍a wake-up call, emphasizing the urgency for budgetary restraint and adherence to fiscal responsibilities. Lindner’s goal ​is to push the coalition to limit new spending requests, so framing the budget in terms of substantial gaps could instill a sense of urgency. We must remember, however, that ⁣such large numbers can also be politically charged; ​they can be used to⁢ advocate ⁣for specific policies or to rally support for ​certain economic measures.

Editor: You touched ​on an interesting point—political strategy. Could the portrayal of⁤ a larger deficit, as stated by Lindner, be a tactic⁢ to secure​ necessary cuts or maintain control over⁤ spending?

Dr. Braun: Absolutely. In fiscal politics, portraying deficits​ or financial gaps can be a ‍powerful tool. By presenting a dire situation, Lindner sets the stage for discipline and prioritizes essential spending. However, as he mentioned, ⁢the ability‍ to take out ‍higher loans⁤ can dilute the immediate perception of‌ the budget gap. It’s a balancing act—while some lawmakers may ​view loans as a way out, others see it as ⁣a risk that could burden future budgets.

Editor: You also noted that the state has room for maneuver. What should we anticipate in terms of economic impact if the government opts to take on more debt?

Dr. Braun: If the government does resort to increased borrowing, it may provide⁣ short-term relief and enable necessary investments, particularly in infrastructure or social programs. ​However, this approach comes with consequences. Higher debt ⁤can lead to increased ‌interest ‍payments and may limit flexibility in future budgets. If not managed carefully, it could hinder economic growth rather than stimulate it.

Editor: It sounds like we are at a crossroad where each decision ⁤carries significant weight. With the opposition within the coalition members, how do you foresee the ‍negotiations playing out in the coming weeks?

Dr. Braun: The next few weeks will ⁣be crucial. As the SPD, Greens, and⁣ FDP continue their discussions, ‍we may see some deep divisions emerge over ‍how best‍ to allocate the resources available. The SPD may want to prioritize social welfare spending, while the‍ FDP will likely argue for fiscal restraint. The ‌Greens could balance both perspectives with a focus on sustainability. The final budget will reflect a compromise, but expect ‌heated debates as they navigate ‌these competing priorities.

Editor: It seems like the path ahead is filled with tension but also potential ‍learning experiences⁢ for ⁤all parties involved. As we close, any final ‌thoughts on ⁢what citizens should ​be aware of as​ this budget process unfolds?

Dr. Braun: Absolutely. The budget is not just a number; it reflects the values and priorities of our society. Citizens should engage in discussions surrounding fiscal⁣ policies, as they impact everyone⁢ from public services to economic stability. Understanding the implications of the budget can empower citizens to advocate for their needs and hold their representatives ​accountable.

Editor: Thank you, Dr. Braun, for your insights today. These budget discussions are certainly critical for Germany’s future, and we appreciate your⁢ perspective on this complicated landscape.

Dr. Braun: Thank you for​ having me! It’s been a pleasure to discuss this important⁢ topic.

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