Actually, the federal budget for this year should have been dry by now. However, a groundbreaking ruling by the Federal Constitutional Court in mid-November thwarted the traffic light coalition’s plans.
The result: billions in holes had to be plugged in the budget and in the climate and transformation fund; the leaders of the SPD, Greens and FDP negotiated this for weeks. The most controversial measure is the gradual abolition of tax relief for farmers on agricultural diesel. The long impasse over the budget has now reached its climax – with the so-called adjustment meeting of the powerful budget committee.
After the verdict, the Budget Committee decided in November not to finally discuss the 2024 budget – so another meeting followed today. In this meeting, the householders wanted to clarify important questions. The “cleanup” is the crucial step on the way to the adoption of the budget in parliament, which is scheduled for early February. A provisional budget is currently in effect. During this time, only expenses that are necessary to maintain administration and fulfill legal obligations are possible.
Coalition agrees on changes
Even before the start of the meeting, which is expected to last until late in the evening, it became known that the traffic light coalition had agreed on important changes. The Greens’ chief budget officer Sven-Christian Kindler said that a planned subsidy from the Federal Employment Agency to the federal budget of 1.5 billion euros in 2024 would no longer be available. The reason is better annual financial statements in the 2023 federal budget – which creates financial flexibility. Specifically, the withdrawal from the reserve should be increased.
Kindler also referred to constitutional concerns. “We take these concerns seriously.” The federal government actually wanted some of its billions in subsidies to the federal agency from the Corona period back. A total of 5.2 billion euros should flow back to Berlin in four years from 2024. This met with massive criticism from the Federal Agency. In a hearing of the budget committee, experts spoke of a “misuse of emergency loans”.
The Union’s chief budget officer, Christian Haase, spoke of a “patchwork”. A new amendment was hastily introduced overnight in order to put the brakes on the next constitutionally dubious operation in the budget of the Federal Employment Agency. “The traffic light seems to have realized that social security is not a self-service shop.” The Union labor market expert Stephan Stracke said: “Unfortunately, the grip on social security funds continues unabated elsewhere.” When it comes to pension insurance, the traffic light wants to “arbitrarily” save a total of 4.8 billion euros
Tightening of citizens’ benefits will be limited
The planned tightening of possible sanctions on citizens’ money is to be limited to two years, as the German Press Agency learned from coalition faction circles. The planned regulation provides for the possibility that in the future job centers will completely cut off citizen’s benefit for unemployed people for a maximum of two months if those affected consistently refuse to take up work. The measure is part of the planned budget financing law. Whether the possibility of complete sanctions should remain permanent after two years will then be decided on the basis of a review.
No suspension of the debt brake for the Ahr Valley
Kindler said that the surpluses from the 2023 budget should also be used to finance aid for victims of the flood disaster in the Ahr Valley. According to the Ministry of Finance, the federal government spent billions less than planned last year. As a result, the withdrawal from the reserve is reduced by 6.3 billion euros. The funds should help finance additional burdens in the 2024 federal budget.
In the 2024 federal budget, 2.7 billion euros in aid are planned for victims of the flood disaster in the Ahr Valley. The federal government had examined whether the debt brake should be suspended again. However, the debt brake could be suspended later in the year – namely if significantly more money is needed to support Ukraine than is currently foreseeable. The debt brake anchored in the Basic Law only provides for a very limited net borrowing. However, it can be suspended in the event of natural disasters or other exceptional emergencies if the state’s financial situation is significantly affected.
Ampel wants to stick to cuts in agricultural diesel
The cuts plans among farmers are highly controversial. The government wants to forego the originally planned abolition of the vehicle tax exemption for agriculture. However, tax breaks for agricultural diesel should be abolished, albeit gradually. “The traffic light coalition stands by this compromise,” said Kindler.
Farmers President Joachim Rukwied, however, threatened new, far-reaching protests from Monday if the planned subsidy cuts for agricultural diesel were not reversed. The previous protests were the “foreshock,” said Rukwied.
Criticism of further planned cuts
Before the adjustment meeting, the Organization One and other associations criticized the fact that development cooperation should be reduced by a total of almost two billion euros compared to 2023. Transport associations criticize planned cuts in funding for rail freight transport and cycling.
