The traffic light has to plan with less money for 2025. Finance Minister Lindner said revenue was 12.7 billion euros lower than expected.
The hopes in the traffic light coalition were high: How high would the federal, state and local tax revenues be? Could the income ease the burden on the strained budget? It has been clear since Thursday: the coalition of SPD, Greens and FDP does not have any more money to spend. Finance Minister Lindner presented the tax estimate for 2025 in Washington. Accordingly, the federal government can expect tax revenue of 982.4 billion euros – 12.7 billion euros less than the Ministry of Finance estimated in May.
Finance Minister Christian Lindner (FDP) expects a small increase of 0.7 billion euros for the federal government alone, mainly through changed transfers to the EU. Nevertheless, this change hardly brings any new leeway in the budget. Lindner emphasized: “We will have to consolidate additionally.”
The traffic light coalition is planning to spend around 490 billion euros next year, with a significant portion being financed on credit. The debt brake allows this, but experts and political opponents doubt the feasibility of the budget plan. The financing gap is two to three billion euros.
Some opposition politicians even believe the deficit is larger. Mathias Middelberg from the Union warned of another spontaneous stop to funding programs in 2025 if the current budget plan is implemented.
A key reason for the results of the tax estimate is the federal government’s poor expectations of economic development. “The challenges are greater than we have perhaps admitted to ourselves in recent years,” Economics Minister Robert Habeck recently stated.
He has just announced the second recession in a row for 2024. Economic output is shrinking, among other things, because companies and private individuals are holding back on investments given the geopolitical situation. Habeck admitted that arguments within the traffic lights also contribute to the uncertainty.