EPAGerman Chancellor Olaf Scholz
NOS Nieuws•vandaag, 10:27
The German government has reached an agreement on the budget. Last month, the government was plunged into a deep crisis when a ruling by the Constitutional Court put an end to the use of tens of billions of euros from an emergency pot for the corona crisis.
The three government parties – SPD, the Greens and FDP – faced the seemingly impossible task of agreeing on closing that gap. After weeks of negotiations, they reached an agreement on the 2024 budget last night.
Climate pot
Scholz’s government wanted to transfer 60 billion euros from the emergency pot for the corona crisis to the climate pot. But the Constitutional Court ruled last month that this was not allowed.
And that had major consequences, because the plans and promises to spend that money were already there. For example, the government announced billions in subsidies this year to attract chip manufacturers to Germany. There were also plans to use the money to dampen high energy costs, both for energy-intensive industry and for citizens.
For the 2024 budget, this initially meant a gap of 17 billion. Although the interests of the government parties differ, they now seem to have found a way to close the gap. The details of the agreement will be announced this afternoon.
Correspondent Charlotte Waaijers:
“The three parties have negotiated intensively about this in recent weeks. It was vital for the government to find a solution together.
On some points they are diametrically opposed to each other. Such as the question of whether Germany can now borrow more money, whether taxes should increase to raise more money and whether they should now cut back on climate plans and allowances.
Now that an agreement has been reached, the deepest crisis appears to be over. Everyone will now look at where the parties had to compromise. Because none of the three parties seems to be coming out of this unscathed.”
The legal action came from the opposition, the Christian Democratic Union, a collective name for the CDU and the Bavarian CSU. He believed that by shifting the billions, the government was circumventing the German ‘debt brake’: a law that the country introduced after the financial crisis. This stipulates that the government may not borrow more than it receives.
Germany could only borrow the money for the corona pot because it had made an emergency exception to the debt brake due to the pandemic. By shifting, the government was circumventing the rules for that emergency exception, the Union believed.
2023-12-13 09:27:11
#German #government #crisis #agreement #budget
