Budget Brawl in North Rhine-Westphalia: Government and Opposition at Odds
The conflict between North Rhine-Westphalia's (NRW) black-green coalition and its opposition has reached a fever pitch. During the multi-hour general debate on NRW's record budget, both the SPD, FDP, and AfD mercilessly critiqued CDU Minister President Hendrik Wüst.
Wüst's idea for a democratic central alliance to tackle major challenges like migration, wars, and energy transition was met with skepticism from FDP parliamentary group leader Henning Höne. Höne opined, "The foundation for a center alliance is the absence of arrogant power displays—this coalition being the exception."
The SPD and FDP were not the only adversaries for Wüst. Opposition leader Jochen Ott lashed out, "Spare us your Hallmark Channel narratives about unity, community, and cookies for single parents. You should promise a firm commitment to the minimum wage and citizens' income instead."
In the end, the state parliament passed the budget for 2024, amounting to over 100 billion euros for the first time. This is a 7.4 billion euro increase from the 2023 budget.
Children's education has the CDU and Greens' primary focus. They will allocate no savings in that area. To cater to this, the state is expanding daycare possibilities and continuing its everyday helpers program with a 140 million euro investment.
Following the federal government's withdrawal of funding for language daycare centers, the state has now stepped in. The budget sets aside a substantial 38 billion euros for education alone, and the state interest expenditure will rise to 3.8 billion euros from 2023. Of this, refugees have been allocated around 3 billion euros.
The CDU and Greens must make cutbacks in various areas due to a decelerating economy, rising interest rates, and lower-than-expected tax revenues. They plan to withdraw more than 300 million euros from the pension fund and 150 million euros from the state-owned Bau- und Liegenschaftsbetrieb NRW (BLB) for the first time.
Adherence to the debt brake will continue in 2024, as it was suspended during the coronavirus pandemic and the Ukrainian conflict on various occasions in NRW. On December 31, the conflict's credit-financed retribution fund of 5 billion euros will conclude.
Ott called for higher taxes on the wealthy to finance education and investment costs. He proposed a joint Bundesrat initiative to revamp inheritance tax for assets worth millions and billions. In October, around 22,000 individuals in NRW protested against the CDU and Greens' perceived unwillingness to provide sufficient funding for daycare centers and all-day schools.
Strong opposition and criticisms from the FDP led the way for Finance Minister Marcus Optendrenk, who was accused of utilizing "budgetary shell games." The opposition maintained that the CDU and Greens' black-green energy and economic policy were detrimental to employment and prosperity in NRW.
Martin Vincentz, the AfD party and parliamentary group leader, shared the same stance. Both he and the federal government would face significant challenges to attain the black zero, resorting to "tricks and gimmicks."
Additional Insights
- The budget for education in NRW has been escalated to a record high of approximately 42 billion euros, with an increase of 11% compared to 2023.
- A budget allocation of approximately 4.2 billion euros is dedicated to crisis management and internal security, an increase of roughly 90 million euros from the 2024 budget.
- More than one-third of the budget (approximately 38.4 billion euros) is allocated to municipalities, with a focus on maintaining their financial stability.
- NRW.BANK aims to achieve a funding target of 11-13 billion euros with an average maturity of five to seven years, increasing the maximum new issuing volume for benchmark bonds to EUR 1.5 billion.
- The regional development bank plans to contribute to reducing prior debt with annual payments of EUR 250 million, enhancing the certainty with which municipalities can plan.
[1] www.stern.de [5]
