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Lindner and Habeck clash when preparing the 2024 budget

A few days after the repeat election in Berlin, Federal Finance Minister Christian Lindner (FPD) and Vice Chancellor Robert Habeck (Greens) clashed violently when preparing the 2024 budget.

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Lindner and Habeck clash when preparing the 2024 budget

A few days after the repeat election in Berlin, Federal Finance Minister Christian Lindner (FPD) and Vice Chancellor Robert Habeck (Greens) clashed violently when preparing the 2024 budget. "We ask you not to make any further public or internal preliminary determinations that unilaterally prioritize further expenditure," said Habeck in a letter available to the Reuters news agency to the FDP leader on Tuesday. He expressly mentioned the areas of share pensions, the armed forces and sales tax reduction for the catering trade "representing the ministries led by the Greens".

Habeck also suggested discussing "how we can improve revenue," reduce environmentally harmful subsidies, and identify programs to be replaced by regulatory law. This means, for example, bans on technologies with high CO₂ emissions. You have to find "new and alternative ways" to implement political projects and to comply with the debt brake, demanded the Green Minister. Since there are still no proposals on the table, “we cannot accept the key figures (for the 2024 budget) either”. The Ministry of Finance is currently negotiating with the ministries about their financial requirements for the budget preparation.

Finance Minister Lindner rejected Habeck's claim in a letter also available to Reuters on Wednesday. On the one hand, he is surprised that the green ministries apparently no longer accept the key figures for the 2024 federal budget. These were approved by the federal cabinet on March 16, 2022, as was the financial plan up to 2026, he wrote. The Ministry of Finance feels bound by this, emphasizes the FDP politician. He also warned that the desire not to prioritize would affect not only the Bundeswehr, but also the "education billion" to strengthen schools.

The background to the debate is that Defense Minister Boris Pistorius, for example, has reported a significant additional need for the 2024 defense budget and refers to the support of Chancellor Olaf Scholz and SPD leader Lars Klingbeil. Media reports spoke of an additional ten billion euros. Ten billion euros have been earmarked for the so-called share pensions implemented by the FDP in the coalition agreement as a new pillar of old-age provision. The Greens are therefore concerned that there may no longer be any money available for projects important to them.

An obvious point of contention between the vice chancellor and the finance minister is how to deal with the debt brake. Habeck emphasized in his letter that he did not want to question the debt brake either. "However, other projects were also agreed, which are by no means subordinate to compliance with the debt brake," he added.

The Minister of Finance replied: "Representing the ministries led by the Free Democrats, I can state that tax increases or other structural additional burdens for the citizens or the economy are excluded from the coalition agreement." Political projects in the coalition agreement are incidentally subordinate to the Debt brake enshrined in the Basic Law.

Lindner emphasized that, especially in view of the economic situation, "an additional tax burden on Germany as a business location is also economically wrong" - a tip against Economics Minister Habeck. With regard to Habeck's commitment to the debt brake, he added smugly: "I was relieved that the ministries led by the Greens are not questioning the Basic Law for the Federal Republic of Germany."

A dispute over compliance with the debt brake has been smoldering in the traffic light coalition for a long time. The FDP insists on compliance in the coming year and has so far had the support of Chancellor Olaf Scholz. The Greens and SPD leader Saskia Esken, on the other hand, were open to a further suspension because necessary investments had priority.

After the Berlin elections, in which the FDP was kicked out of the House of Representatives and the Greens came in third, it was expected that the climate in the traffic light coalition could deteriorate.

Differences in budgeting are normal. Greens and FDP have been arguing for weeks about the planning law, which should be accelerated. The Greens would like to exclude motorway projects, while the FDP is pushing for a general acceleration of infrastructure projects. Both the Chancellor and leading SPD politicians have made it clear that they too are more in favor of a general acceleration of planning.

The traffic light government wants to complete the negotiations on the key figures for the 2024 budget and financial planning by March 3rd. The key figures are then to be decided by the cabinet on March 15th. The cabinet decision on the budget is scheduled for June 21.

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