Finance Minister Christian Lindner has called on his cabinet colleagues to draw up savings plans in view of the difficult budgetary situation. In the federal budget for 2024, cuts cannot be ruled out, wrote the FDP politician at the beginning of the budget in a letter to the highest federal authorities, available to the German Press Agency.
Cutbacks may become necessary if revenues are reduced or there are additional burdens on top of planning. “Each department is therefore called upon to identify the potential for reallocation of its expenditures at an early stage,” Lindner wrote.
The finance minister has called for “budgetary priority”. For the entire subsequent legislature, “all expenses should be tested”. If the debt brake is respected, there will be no room for maneuver in the budget by 2024. Lindner insists on meeting the debt rule enshrined in the Basic Law in the coming year without exception. Depending on the economic situation, the Confederation can only take out small loans. Exceptions are only allowed in emergencies and were made more recently due to the corona pandemic and the war in Ukraine.
As a result, the federal government’s debt-to-GDP ratio will rise to 70 percent of economic output, Lindner warned. The billions invested in aid packages were needed to stabilize the economy and protect citizens in the acute crisis. But now you have to be careful not to push inflation further. Germany must therefore abandon its expansionary fiscal policy, reduce its deficit and build up financial reserves, she wrote.
