Federal budget: Lindner remains firm – now “household mikado” is played

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Dhe words sound familiar. “A country cannot live beyond its own means.” Free beer for everyone makes everyone popular, but then “the cart hits a wall”. Now is a “time to save”. That said on a Sunday afternoon in June 2010 the then FDP chairman and Vice Chancellor Guido Westerwelle at the beginning of a two-day austerity retreat of the black-yellow coalition, for which Angela Merkel (CDU) had ordered her ministers to the chancellery.

There was no escape. Until Monday afternoon, the coalition partners argued behind closed doors about savings contributions and cuts, tax increases and new levies. Then a compromise was found. Merkel announced the largest austerity package in German history. More than 80 billion euros should be saved in the following four years, the expenditure for the federal budget in 2011 alone was eleven billion euros lower.

Merkel then spoke of a “unique effort” in serious times. Social benefits should be reduced, discounts for companies removed, the state apparatus reduced – above all in the armed forces, where the then defense minister Karl-Theodor zu Guttenberg (CSU) put the end of compulsory military service on the Spartisch. Which is known to have happened.

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The names of the ministers and the issues are different today – as can be seen not only in the case of national defence. But there are increasing numbers of references to the austerity program in the summer of 2010 in political Berlin since Finance Minister Christian Lindner (FDP) postponed the presentation of his key figures for the 2024 federal budget late Thursday evening.

Actually, the first, rough figures for the upcoming federal budget and the financial plan up to 2027 should be adopted by the cabinet next Wednesday.

Lindner’s justification for the step sounds exactly like Westerwelle’s back then. “We will discuss this together again in the cabinet financial realities have to speak,” Lindner told the dpa news agency. The high interest burden is a clear signal to curb government debt.

Public service and Ukraine conflict costs

At the same time, citizens were already paying high taxes. “So we have to learn to get by with the available financial framework.” Since not everything can be financed at the same time, clear priorities must now be set. This means that if you want something, you have to do without something elsewhere. Lindner categorically rules out a relaxation of the debt brake and tax increases.

Another parallel to 2010: This time, too, double-digit billions must be saved. Lindner’s ministerial colleagues had allegedly announced additional requests of 70 billion euros for the next year.

However, the finance minister sees no scope for this in the budget. Especially since the burdens continue to increase. In addition to the high interest payments, the ongoing collective bargaining and further military aid for Ukraine are mentioned.

Read more about the federal budget

A Bundeswehr main battle tank of the Leopard type

Munich Security Conference

From left: Economics Minister Robert Habeck (Greens), Chancellor Olaf Scholz (SPD), Finance Minister Christian Lindner (FDP)

The traffic light and the household

Comparison of all EU regions

Robert Habeck and Christian Lindner sit side by side on the government bench in the Bundestag

It is still unclear how the deadlock in the traffic light coalition can be resolved. The three-way constellation of SPD, Greens and FDP makes things even more difficult. 13 years ago there were three parties at the cabinet table, but with the CDU and CSU there were still two that call themselves sister parties.

The mood was tense then as it is now. “They’re playing household pick-up sticks at the moment,” is how an experienced householder describes the current situation. Nobody is ready to move. If the new Defense Minister Boris Pistorius (SPD) gets more money for the Bundeswehr, Development Aid Minister Svenja Schulze (SPD) will also want additional funds, as will the Foreign Ministry from Annalena Baerbock (Greens).

There is also a debate about new funding programs after the Economics Minister Robert Habeck (Greens) promoted ban on new oil and gas heating systems from 2024. And of course FDP ministers also see an increased need for funds in their areas, whether Volker Wissing for transport or Bettina Stark-Watzinger for education and research.

By the fall, there will be a struggle for billions

Another problem is basic child security, which will only be financed from 2025, but should already be reflected in medium-term financial planning. There is talk of twelve billion euros.

However, the traffic light coalition only agreed that services from child benefit to child allowance and financial support for school trips should be bundled and better received by the beneficiaries. It is disputed whether this should also mean a multi-billion dollar financial increase.

First of all, there is no time pressure. The first step is only about the cornerstones of the coming budget. The detailed draft law is not to be drawn up until June anyway, based on the next tax estimate – and only after the summer break will the draft go to parliament, where the struggle for millions and billions will continue until late autumn.

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Habeck on current topics of energy and industrial policy

“Indisputably, the preparation of the federal budget for 2024 will be a challenge,” says Dennis Rohde, budget spokesman for the SPD. It is not unusual for the budget to be postponed. He welcomes the fact that the government is taking the necessary time.

The opposition is less forgiving. “The postponement proves that the spirit of Meseberg has quickly evaporated,” says the deputy chairman of the CDU/CSU parliamentary group, Mathias Middelberg, alluding to the cabinet meeting a few days ago.

“The SPD and the Greens in particular have not understood the seriousness of the situation, the fundamentally changed situation caused by the turn of the century and persistent inflation,” says the finance politician. If the traffic light parties could not come to an understanding, that says a lot about the desolate state and the lack of leadership in this government.

It remains to be seen whether and when Olaf Scholz will invite you to the Chancellery for a savings exam.

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