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Budget dispute escalates in German coalition government

Arthur Franke by Arthur Franke
August 5, 2024
in Politics
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A new conflict has erupted within Germany’s coalition government over the 2025 budget. Finance Minister Christian Lindner’s recent actions have angered his coalition partners from the SPD and Green parties.

Budget dispute escalates in German coalition government
Christian Lindner (FDP), Federal Minister of Finance

Coalition partners criticize Lindner’s approach

SPD and Green party members have strongly criticized Finance Minister Christian Lindner (FDP) for his handling of the 2025 budget negotiations. Lindner ordered constitutional and economic reviews of several previously agreed-upon measures, despite a compromise reached earlier with Chancellor Olaf Scholz (SPD) and Vice Chancellor Robert Habeck (Green Party).

SPD General Secretary Kevin Kühnert expressed his disapproval in an ARD interview, stating, “Hiding behind alleged or actual expert opinions and saying it wasn’t meant that way is not good style.” He particularly criticized the timing of the announcement while the Chancellor was on vacation, describing it as “self-promotion.”

Green Party parliamentary group deputy Andreas Audretsch accused Lindner of unilaterally canceling a joint agreement. He emphasized that there would be no cuts to social programs or climate protection measures with their support.

Concerns over budget cuts and legal risks

SPD budget expert Achim Post stressed via the newspaper Bild that the state budget should not be a mere austerity budget but must ensure social, internal, and external security while creating essential investments. The SPD expects “constructive solution proposals that are legally sound” from the Finance Minister.

The coalition leaders had announced a budget compromise in early July after weeks of negotiations to close a gap of at least 30 billion euros. However, Lindner’s commissioned review revealed legal risks, particularly regarding plans to repurpose 4.9 billion euros from the KfW development bank’s gas price brake funds and the proposal to provide loans instead of grants to the highway company.

FDP defends actions amid criticisms

Lindner defended his actions in a ZDF summer interview, stating that the review of several measures had been agreed upon. He emphasized transparency in his approach and referenced a previous coalition compromise on the budget that was later rejected by the Federal Constitutional Court, saying, “That won’t happen to me a second time.”

FDP General Secretary Bijan Djir-Sarai supported Lindner, criticizing the recurring demands to loosen the debt brake. He called the “debt populism” of the SPD and Greens “increasingly unbearable” and stressed the need for careful management of available funds out of respect for taxpayers.

Moving forward, Lindner estimated the remaining financing gap for the 2025 budget at around five billion euros. He plans to consult with Scholz and Habeck by mid-month before the draft budget goes to the Bundestag, where it is scheduled to be approved by the end of November.

Tags: Christian Lindnercoalition governmentSPD

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