It’s not every day that you see an appearance like this by a finance minister who lectures his fellow coalition members. After the tax estimate, the budget for the coming year has to be adjusted a third time; you can almost write a book about the 2025 budget. Agreeing on all the announcements is like squaring the circle. Lindner now sees a need for additional action in the single-digit billions, “although the number is closer to ten than one.”
And now he is sitting in ZDF’s “heute-journal” from Washington, where he is attending the fall meeting of the International Monetary Fund. “Financial policy cannot repair what economic policy fails to do,” he says in the direction of his cabinet colleague Robert Habeck from the Greens. A different economic policy is now needed, less tax burden, less bureaucracy, less ideology. If Habeck is now calling for debt-financed subsidies again, and the Economics Minister is talking about innovation bonuses, then that would be “conceptual helplessness”. And the fact that the Chancellor has now invited industry and union representatives to the summit on Tuesday and could offer them the prospect of generous help does not meet with Lindner’s approval. “No, Mr. Scholz’s suggestions were not coordinated and neither were Mr. Habeck’s.”
Germany’s economy is in crisis and now the different solution concepts of the FDP on the one hand and the SPD and the Greens on the other are colliding. Lindner wants to save elsewhere; for example, he has an eye on housing costs for citizens’ benefit recipients and refugee Ukrainians; through flat rates and, if necessary, moving to other apartments. In order to create scope for relief for companies – and above all he wants to free them from more and more bureaucratic burdens; The Chancellor, for example, is also currently moving away from the Supply Chain Act. The SPD and the Greens, on the other hand, would like to loosen the debt brake in order to counteract this with more investment.
:Welcome, Mr. Olaf Scholz
Does the Chancellor still see things clearly? In the 1,000 episode “Maybrit Illner” he is super relaxed again. But even while recording, he doesn’t yet know the latest comments from his traffic light.
Lindner invites you to a counter-event
With regard to the major differences that are no longer concealed, Lindner says: “That is a problem in itself, I want to tell you that very clearly. This creates uncertainty.” He is convinced that 50 percent of the problems in economic policy, starting with the reluctance of investors, “are related to politically created uncertainty.” Greetings to Robert Habeck, who emphasized that he was Chancellor there would never be a Finance Minister Lindner. He gives a disguised ultimatum. “This autumn, clarity must be created as to what direction this country is taking in financial and economic policy. Otherwise, economic development will suffer further damage.” If you don’t make any progress with what the country needs now, “then everyone will have to give up their cards.” Incidentally, he has now held a parallel meeting with the Chancellor’s industrial summit with parliamentary group leader Christian Dürr Kind of counter-event invited on Tuesday. Namely the associations that are not there with the Chancellor – employers’ association, the German Chamber of Commerce and Industry, the trades and family businesses. People in the FDP are annoyed that the industrial summit was not agreed upon and that those who were constantly demanding new subsidies were especially invited.
Those around the Chancellor are trying to emphasize that they would not see this as a competitive event. In the SPD parliamentary group you think that Lindner can see how great the business associations think his savings plans are in times of recession. But all of this is the working mode of a coalition that wants to hold out for another year. Everyone seems to be doing their own thing, it seems like they are preparing for their own election campaign. But when it comes to household matters, everyone still has to find their way together somehow. And at the working level, the three chief housekeepers of the traffic light, Dennis Rohde (SPD), Sven Christian Kindler (Greens) and Otto Fricke (FDP) are an example of how things can be done differently. They have already solved many problems and work together in a spirit of trust . “Budgets are not a simple set of numbers, but are made in a struggle with one another to find the best solutions for the people in this country,” emphasizes Rohde. “No singular ideas are expected for this, but only proposals that are agreed at the top of the government Federal Government on how the remaining gaps can be closed.
The tax estimation working group has calculated that the federal, state and local governments can expect tax revenue of 982.4 billion euros in 2025. 12.7 billion less than forecast in May. The federal government is still in the best position, as it has to pay 7.7 billion euros less to the EU than expected – and can therefore even hope for a small increase of 700 million.
Scholz wants an industrial summit – but what can he offer?
But one thing is clear: Contrary to what was hoped, the gap in the budget is not really getting smaller; it still amounts to around 13.5 billion euros. Lindner, for example, would like to use the seven billion euros that were actually supposed to flow as subsidies to the US chip company Intel. Because Intel has postponed the planned construction of a factory near Magdeburg, they are now available. However, at the same time there is a risk of significant additional expenditure, for example in the case of citizens’ money, because fewer people than hoped could be placed in work due to the economic downturn. There are also additional costs for promoting renewable energies. “We will have to consolidate additionally. Not every state service will still be possible.”
The SPD’s answer, however, is: more debt. In view of the sluggish economy and the industrial crisis, the Chancellor’s party wants to focus on saving jobs and increasing investments. Scholz has just announced the industrial summit, but what does it have to offer given the budget situation? The Greens are also going in a similar direction. Their economics minister, Robert Habeck, is proposing a state fund worth billions; with high investment bonuses for companies and investments in energy and communication networks, transport routes and educational institutions.
Householders can hardly remember that they received such an unfinished template and now have to save billions of euros in just a few weeks – if they don’t agree to suspend the debt brake. There is a growing longing in the SPD for more leadership – and a power word from the Chancellor, instead of new negotiations with the slide rule.
A break and new elections are certainly possible
The fixed date is November 14th, which is when the so-called adjustment meeting of the budget committee of the German Bundestag takes place, and then the budget actually has to be finalized. A break can no longer be ruled out internally, with new elections, for example on March 9th.
Anger is growing, especially in the SPD. Lindner’s type of budget consolidation is “a serious problem for the German economy,” said parliamentary group leader Rolf Mützenich South German newspaper. “We will do everything we can to get Germany back on a sustainable growth path with smart investments,” emphasizes Mützenich and demands from the Chancellor: “Olaf Scholz must continue to make these questions a top priority and even more clearly.”
Without new growth impulses, tax revenues would continue to decline, which in turn would not be available for investments. “We have to break this vicious circle.” The SPD budget and defense expert Andreas Schwarz says: “Now comes the moment for action and decisions.” This estimate does not make preparing the budget any easier. “The figures show that the country urgently needs growth impulses – and quickly.”
Would Lindner really let the coalition collapse because of this?
Schwarz demands what Lindner further categorically rejects: “If not now, then when is it time to modernize the debt brake?” The future cannot be consolidated, he says with greetings to Christian Lindner. When presenting the budget in July, which was then corrected again and now has to be adjusted again, Mützenich emphasized that an emergency resolution remained on the table for him. He would be in favor of excluding all costs for Ukraine support from the debt brake and thus creating scope elsewhere. The SPD is demanding that the Chancellor have to assert himself against Lindner and his FDP; With three percent in the polls, Lindner couldn’t let the coalition collapse because of that.
The Chancellor is currently in India with half his cabinet for government consultations, a country in which the economy grew by 7.8 percent last year and 6.8 percent growth is expected for the current year. The big question is whether, given such growth figures, the Chancellor will return with fresh ideas to complete the budget puzzle. There will certainly soon be a revival of a well-known discussion format to help parliament: the rounds of Scholz, Habeck and Lindner. When they happily presented their first draft in July, they had negotiated for around 80 hours. But as we know today: little was solved.
