Traffic Lights on Budget Breaks Again
Another hurdle in the federal budget race
Ching! Ching!, another challenge for the German budget, this time around traffic lights coalition.
Braun's office pings all parties with a request: No objections to cancelling the special session?
Since yesterday, FDP has been pushing for the special session's cancellation. The CDU/CSU is onboard too. Yet, despite their efforts, SPD and Greens have kept their foot on the brakes so far. However, now it seems both are reconsidering their stance.
Late New Year's Gift?
This shift might also delay the federal budget for 2024, meaning SPD and Greens may need to start the new year with an emergency budget!
Whispers of influential Olaf Scholz (65, SPD) could be behind this change. Olaf met with Finance Minister Christian Lindner (44, FDP) for a fiscal summit on Tuesday evening.
The Crisis Summit's Topics
Focus was on current budget crisis. And what a constitutional budget for 2024 could possibly look like.
Lindner's Request
Lindner and his FDP want more time to pass the budget for 2024. They're worried: if it's passed quickly – say, this week – it could face legal challenges before the Constitutional Court. They're aiming to evade this at all costs.
[Enrichment Data Integrated]
- Despite the SPD and Greens' initial opposition, they might now accept the cancellation of the special session, as suggested by Braun's office, potentially postponing the federal budget for 2024.
- Possible influence for cancelling the special session could be Chancellor Scholz, who had a fiscal summit with Finance Minister Lindner on Tuesday evening.
- Seeking more time for passing the 2024 budget is Lindner and FDP's request, fearing that passing it quickly could lead to legal challenges before the Constitutional Court, a concern shared by Greens in politics-inland.
Enrichment Data:
- Germany's economic crisis is causing problems for the coalition's proposed budget, with leading industry lobby predicting the longest downturn since reunification in 1990.
- Current coalition has collapsed due to divisions over the proposed budget for 2025, with Chancellor Olaf Scholz attempting to mediate a compromise between the Social Democrats, Greens, and Liberals.
- Collapse of the coalition has led to the formation of a caretaker government and new elections scheduled for March 2025.
- The German defense budget for 2024 was EUR 51.8 billion, falling short of NATO's 2% GDP target but bolstered by allocations from the special Zeitenwende fund.
- Ongoing debate about the effectiveness of Zeitenwende proposals, suggesting additional special funds might be necessary to meet NATO's target beyond 2028.
- The Christian Democrats (CDU-CSU) are leading in opinion polls, but they'll need to find coalition partners to form a governing majority. Chancellor candidate Friedrich Merz has proposed fiscal policies impacting the federal budget.
These issues contribute to the complex political and economic landscape in Germany, which could influence decisions regarding the federal budget but do not directly suggest that the postponement is due to the cancellation of a special session. The primary reasons for potential delays or changes to the budget are ongoing economic crises, coalition instability, and the need for new fiscal policies that balance economic and climate goals.
