The dark-green state government of NRW will present the draft state budget for 2025 and a supplementary budget for 2024 to the state parliament on Friday (10am). This is likely to lead to a bitter conflict between government and opposition groups. For the first time, the CDU and the Greens are planning billions in debt as part of the statutory debt bankruptcy.
In response to the always weak economic development in Germany and the poor tax forecasts, the country is using the so-called economic component for the first time in the supplementary budget 2024 and in the draft budget 2025 According to the draft, loan authorizations worth 1.34 billion euros can be issued for the 2025 budget, and loans worth two billion euros could be used for the supplementary budget 2024.
Budget table – and austerity measures still in place
Despite the prescribed austerity course, the size of the budget in 2025 is expected to increase by around three percent – around three billion euros – to a previous high of 105.5 billion euros. Spending on education alone will increase by around 3 billion euros next year to a higher level of almost 42 billion euros. An additional 50,000 full-day places will be created in primary schools (OGS) in 2025.
Welfare institutions, on the other hand, criticize the planned major cuts to social infrastructure. According to calculations by Diakonie and Freie Wohlfahrtspflege NRW, almost 90 million euros should be cut here. It is also not clear how the comprehensive security package presented by Prime Minister Hendrik Wüst (CDU) on Wednesday with dozens of measures, for example in the area of asylum, will affect the draft budget.
Debt must be paid off in better times
Finance Minister Marcus Optendrenk (CDU) had already spoken about extremely difficult conditions. Political decisions at the federal level such as the elimination of cold progress, an increase in housing benefits or the German ticket will impose a permanent additional burden of four billion euros per year on the state budget from 2023. At the same time, price increases are high in recent years, much higher bargaining agreements and higher interest rates also put pressure on the budget.
The debt brake anchored in the Basic Law stipulates that federal and state governments’ budgets must generally be balanced without income from loans. However, the economic component generally allows new loans to be issued in difficult economic times. These must be paid back quickly when the economic situation improves.
Access to old debt settlement
As promised, the Black-Green coalition will enter the old debt regime for municipalities in 2025 and spend 250 million euros on it for the first time. In total, cities will receive almost 16 billion euros in 2025 as part of the Municipal Financing Act and a further allocation of more than 20 billion euros.
The country also has to repay billions in loans from the Corona rescue package and the special fund to deal with the consequences of the war in Ukraine. Annual repayments of 350 million euros are expected for the years 2025 to 2028.
2024-09-13 06:32:11
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