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Berlin – After a marathon negotiation last night, the traffic light coalition partners have agreed in principle on a federal budget for 2025.

Chancellor Olaf Scholz (SPD) today countered speculation about a possible coalition breakdown, which had become increasingly louder in recent days: “Losing your nerve, giving up, running away from responsibility – as Chancellor I would have no understanding for that.” Germany must be an anchor of stability in Europe at this time.

According to Lindner, Scholz, Finance Minister Christian Lindner (FDP) and Economics Minister Robert Habeck (Greens) met 23 times to discuss the budget. It took until around five in the morning to plan the federal government’s spending for the coming year. The budget still has to be approved by the cabinet and discussed in the Bundestag.

The FDP has prevailed on the debt brake. The agreement on the budget and the financial plan until 2028 provides for compliance with these. An emergency situation is therefore not to be declared. Next year, the government is planning on new debts of 44 billion euros – within the framework of the debt brake, as Lindner assured. Expenditure of 481 billion euros is planned, of which 57 billion euros are investments.

In order to reduce the pressure on ministries to save money, the traffic light coalition found ways to gain additional leeway. One option mentioned in government circles was a “more realistic estimate” of EU contributions. This would include lower interest payments, for example, and the posting of individual budget items could be postponed. The coalition is also talking about a so-called global reduction in spending. These are savings targets that are not specified in detail. The coalition is counting on the fact that ministries will need less money.

However, the coalition said that it was “by no means” an austerity budget. Every stone in the budget had been turned over where spending could be reduced. A supplementary budget of eleven billion euros is planned for the current year. In 2024, net borrowing will rise to 50.5 billion euros as part of the debt brake.

Concrete agreement has already been reached according to a policy paper submitted to the German Medical Journal is available, with the immediate child supplement for needy families in the citizen’s allowance and with the child allowance.

According to the paper, this is to be increased by 228 euros to 9,540 euros this year. Next year it will be increased by another 60 euros to 9,600 euros. The allowance is deducted from taxable income and therefore reduces tax for families.

Although nursing care insurance and statutory health insurance are groaning under the financial burden, neither play a role in the paper. It is primarily about external and internal security, growth packages for the economy, child benefit, pensions, climate and the housing shortage. Other priorities that the traffic light coalition wants to set with its agreement on the budget and growth package: reducing bureaucracy, tax exemption for overtime, special depreciation for commercially used electric cars.

The cabinet is expected to approve the draft budget in mid-July. Only then will the many details on the individual departments be available. The first debate in the Bundestag is planned for mid-September, and the budget is then expected to be approved in November or December of this year. © may/dpa/aerzteblatt.de