What does the updated tax estimate mean for the traffic light?
Lindner‘s FDP has already made it clear that it does not expect any scope for new spending requests due to the difficult economic situation. Regarding the numbers that have now been published, Lindner said: “We will have to consolidate additionally.” Not every state service will still be possible. “We need economic growth.”
According to Federal Economics Minister Robert Habeck (Greens), a state fund should motivate companies to invest more. The fund is intended to cover ten percent of the investment costs and advance Germany’s climate-neutral modernization. However, Lindner is very skeptical about the idea, and sharp criticism comes from the Union.
What does all this mean for the debt brake?
The amount of tax revenue is only indirectly related to the debt brake: If the economy weakens and the state collects less taxes, it can take on (slightly) more new debt. For 2025, this means that around 55 billion euros in new debt would be possible, with a budget volume of just under 490 billion euros. However, a weaker economy means higher spending elsewhere, such as citizens’ money.
The SPD and the Greens have been calling for a reform of the debt brake in the Basic Law for a long time. Their argument: The state should take on more debt to finance the restructuring of the economy and necessary investments in infrastructure. The FDP around Finance Minister Lindner, on the other hand, is sticking to the debt brake, as is the Union as the strongest opposition force. A two-thirds majority in the Bundestag, which would be needed to reform the debt brake, is therefore not in sight.
Why are the municipalities in Bavaria sounding the alarm?
Bavaria’s municipalities are warning that they will have to cut certain services. This is because the costs have increased dramatically, while the financial resources have remained virtually the same. In the Free State, the deficit in the districts, districts, cities and municipalities climbed to 5.1 billion euros. The updated tax estimate is unlikely to change this situation much.
