Even the chancellor’s negotiating team has so far apparently failed to achieve any breakthroughs.
(Photo: dpa)
Berlin The federal government’s budget dispute remains unreconciled despite the intervention of Chancellor Olaf Schulz (SPD). Handelsblatt has learned from government circles that the ministries led by Green Party politicians are refusing to approve austerity measures even after talks with Scholz and Finance Minister Christian Lindner (FDP).
A government representative familiar with the negotiations said a deal had now been reached with the SPD- and FDP-led ministries. But: “The Greens are blocking themselves.” So far, Schulz’s presence has led to no movement.
Finance Minister Lindner sent a letter to ministries two weeks ago setting out the maximum amount they can spend in the coming year. Cuts vary by ministry. They should mainly affect so-called discretionary spending, such as funding schemes. Social fees with legal rights are not included.
>> Read here: Lindner sends savings targets to all ministries
Lindner has agreed the specifications with Scholz and vice-chancellor Robert Habeck (Greens). A procedure was also agreed: If the ministers do not accept the savings target, they will have to negotiate not only with Lindner, as usual, but also with Schulz.
The chancellor’s participation in the talks is also a signal to ministers that Schulz supports budget cuts – so softening the budget is unrealistic.
Greens advocate tax hikes over austerity plans
But despite Schulz’s support, the Greens are clearly not ready to back the savings. This clearly shows how different budget policies are now. The Greens have rejected spending cuts, instead calling for tax increases to boost revenue. In turn, the Liberal Democrats have ruled that out – and have the chancellor’s backing.
>> Read more: Budget shortfall of £20bn – now chancellor steps in
Budget negotiations have been relatively easy in recent years because tax revenues have been rising steadily — and the debt brake has been suspended. The finance minister insisted that the debt brake should come into effect again in the coming year. Taxes, meanwhile, have hardly any new wiggle room.
According to information provided by the Ministry of Finance, about 20 billion euros are missing from the budget. So savings must be made – even though many ministries are actually planning to increase spending significantly. This has been a source of controversy for months.
Who is particularly affected by savings options
According to Der Spiegel, Lindner hopes to save the ministries a total of around 3.7 billion euros. Transport Minister Volker Wissing (FDP) has to make the biggest contribution to the savings with just over 1 billion euros, followed by Research Minister Bettina Stark-Watzinger (FDP) with 533 million euros.
Economics Minister and Deputy Prime Minister Robert Habeck (Greens) will receive 387 million euros. Interior Minister Nancy Faeser (SPD) must forgo 378 million euros and Development Minister Svenja Schulze (SPD) 329 million euros. Annalena Baerbock, the foreign minister from the Green Party, had to spend 189 million euros less.
Only Defense Minister Boris Pistorius (SPD) is exempt from the austerity program, which he can even plan with more money. However, he is said to have been dissatisfied at first, as he bet the payout would increase even more.
The federal government hopes to agree on a budget by the end of this month. In early July, Cabinet is due to take a decision on the draft budget before parliament’s summer recess begins.
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