Budget dispute: Lindner plans 20 billion austerity package tagesschau.de

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As of: 04/14/2023 6:43 p.m

According to the “Spiegel”, Federal Finance Minister Lindner wants to save 20 billion euros in order to close the financing gaps in the budget. SPD parliamentary group leader Mützenich criticizes that the upcoming consultations are like “open-heart surgery”.

The traffic light coalition has been arguing about the upcoming federal budget for weeks. According to a “Spiegel” report, Federal Finance Minister Christian Lindner (FDP) is now preparing spending cuts of up to 20 billion euros. The magazine reports, citing the Federal Ministry of Finance, that he wants to close the funding gaps in the 2024 federal budget and create some leeway for unavoidable additional spending.

According to the report, a so-called budget accompanying law should be launched in order to save the funds. This could limit statutory state benefits, such as subsidies or social spending.

Spending cuts in Department of Labor and Family Affairs

According to the “Spiegel”, the priority must be to save in the departments with the highest social spending. The labor and family ministries would be affected. The Ministry of Defense should therefore be spared.

Theoretically, such a plan could also include tax increases, which Lindner’s officials rule out, according to the report. The federal government must be able to finance its expenditure of 424 billion euros with constantly growing tax revenue without increasing taxes, it is said.

In fact, persistently high inflation should ensure that tax revenues increase despite the weak economy. However, the additional income is not plentiful enough to plug all the budget holes. Austerity measures are therefore unavoidable, reports the “Spiegel” with reference to the ministry.

Financial planning after the tax estimate for May

In March, Lindner canceled the setting of benchmarks for the 2024 budget and financial planning up to 2027 at short notice. He justified this by saying that the overall spending plans were far in excess of the expected income and the permissible new borrowing. The cabinet is scheduled to launch the draft budget and financial planning on June 21 – after the tax estimate for May.

Lindner absolutely wants to comply with the legally anchored debt brake and has prescribed an austerity course for the coming budget. Recently, however, he again campaigned for a tax growth package intended to strengthen the competitiveness and productivity of the German economy. He also suggested, among other things, investment bonuses, tax incentives for research and new depreciation options.

Mützenich criticizes Lindner’s austerity measures

SPD faction leader Rolf Mützenich criticized the dispute over the budget and Lindner’s proposals. “I expect seriousness in the deliberations, especially from the cabinet members who are responsible for drawing up the budget and who nevertheless keep making extensive requests for spending themselves – while at the same time insisting on the discipline of others,” he told the dpa news agency. The upcoming budget deliberations resembled an “open-heart operation,” said Mützenich. He therefore expects “collaboration and restraint in communication from everyone involved”. The necessary savings are “a tour de force for everyone”.

In order to mobilize new funds in the federal budget, Mützenich suggested opening the Economic Stabilization Fund. “Of course we have to check exactly where there is potential for savings. But we should also talk about how we can mobilize additional funds from existing reserves.” The economic stabilization fund set up during the corona pandemic was reactivated during the energy crisis. Currently, the electricity and gas price brakes in particular are being financed from this. Due to falling prices, however, the financing of the brakes could become significantly cheaper.

The FDP rejected the allegations. “The FDP expects that the coalition partners are committed to economic growth and jobs,” said FDP parliamentary group deputy Christoph Meyer of the dpa. “Because the economy and people financed the welfare state. Meyer also rejected opening the economic stabilization fund.

Controversial child protection

One of the main points of contention is basic child security. Federal Family Minister Lisa Paus is pushing for the start of a legislative process for the project. “Otherwise it will indeed be nothing by 2025,” said the Green politician in an interview with the SWR. “That would be a fiasco for the entire traffic light government.” Paus accused Finance Minister Lindner of wanting to “spend the money on other things.” In the coalition agreement, basic child security is “the top priority as the socio-political project of this traffic light. And that can’t be argued away,” said Paus im SWR.

The FDP criticizes the lack of a concept for the project. “Platt to ask for more money without being able to say what for – that just doesn’t work with us,” said FDP party Vice President Johannes Vogel to “Focus”. Paus must provide a coherent concept as to how “the previous wild growth” in services for children “can finally be cleared and sensibly sorted,” said Vogel. The family minister “does not do this homework”. Instead, she blames Finance Minister Lindner. “We’re not getting anywhere like this.”

From 2025, basic child security is to bundle various services such as child benefit and child supplement. Paus also believes – unlike Lindner – that performance increases are necessary. She puts the annual requirement at twelve billion euros.



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