Traffic light agreement on budget: What this means now

by times news cr

2024-08-18 06:49:51

The traffic light coalition has raised the billions needed for the budget. The coalition is thus saved – for now. But things are unlikely to get any better.

Robert Habeck has to get somewhere quickly. It is Tuesday evening this week, and the Vice Chancellor has just completed his last appointment of the day on his promotional tour for heat pumps. In Norderstedt, he looked at a large-format model that converts waste heat from a data center into district heating for hundreds of households.

Now the Vice Chancellor is supposed to drive to the hotel with the journalists in the press bus. But just before the door he turns back to his official limousine. “I’ll just check my cell phone,” he says, “for good reason.” He doesn’t need to say anything more.

The “given reason” these days is the renewed dispute over the budget. Habeck can’t stop thinking about the matter, even when he’s traveling. Between his appointments, he tries to raise the missing billions with Chancellor Olaf Scholz and Finance Minister Christian Lindner.

The “big three” of the traffic light government have now achieved this. There is a solution. However, it is a very delicate one, once again after a long wrangling that Habeck in particular was annoyed by and showed publicly. The acute break in the government has thus been averted, but that is all. The dispute seems to have cost the last bit of trust.

The fact that it has come to this point shows just how broken the coalition is. At the beginning of July, they actually announced that they had reached agreement on the budget. From the perspective of many coalition members, this was more bad than good, but still.

What was immediately clear: the compromise should be reviewed again by experts. Lindner, Scholz and Habeck agreed on this. Nobody wanted the budget to be overturned by the Constitutional Court again. Especially in the year before the federal election.

After agonizing negotiations, Scholz, Habeck and Lindner found three rather creative ways to close the last gap of eight billion euros. However, this was on the condition that they were first checked by an economic and legal report.

Is the budget now secure? Finance Minister Lindner had the agreement reviewed again. (Source: Michael Kappeler/dpa/dpa-bilder)

The experts unanimously rejected the idea of ​​using billions of gas subsidies left over from the state development bank KfW for the budget. They thought it was fundamentally possible to give money to the railways without complying with the debt brake. The political debate erupted over the question of whether the same thing would work for Autobahn GmbH, which has not yet generated any income of its own.

Lindner’s people made the reports public and immediately provided their interpretation of the results: This is not acceptable for the motorway, more savings must be made, preferably in social spending. Much to the annoyance of Scholz and Habeck, who would have preferred to sort this out internally.

Now there is an agreement, and as is often the case with the traffic light coalition, there is something for everyone. The motorway idea has been rejected, Lindner’s concerns have prevailed. But there will be no more savings, which was important to Scholz and Habeck. But that means that the traffic light coalition will not end up raising eight billion, but only five billion from the railway and two other small items. It has therefore missed the target it set for itself.

The price: The budget hole that all governments plan for in their drafts because not all of the money is actually spent is now three billion euros larger than the traffic light coalition actually wanted. The so-called global spending cut is now twelve billion euros instead of nine billion euros.

That could prove tricky. Lindner himself argued a few weeks ago that a global spending cut of more than nine billion euros “raises constitutional questions”. The Union may therefore already be considering whether to take the matter to the Federal Constitutional Court again.

Scholz, Habeck and Lindner have thus achieved the minimum that a government has to manage every year: a cabinet draft for the budget. But the question of whether it will survive the autumn is open. Even if the plans are constitutional. The SPD, Greens and FDP in the Bundestag will now be poring over the columns of figures. Many there are dissatisfied – and will request changes. In our experience: all different ones.

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