faq
After the traffic light coalition reached an agreement in the budget dispute, details have become known. Why are there still funding gaps? What are the much-cited reductions in spending – and what happens next?
The federal government has had a really hard time with this draft budget: countless hours of negotiations involving the Federal Chancellor, annoyed coalition partners and a package that was reopened because of the threat of a breach of the constitution. Now there is a compromise. How did it come about and what does it contain?
Why were further negotiations necessary?
At the beginning of July, Chancellor Olaf Scholz (SPD), Economics Minister Robert Habeck (Greens) and Finance Minister Christian Lindner (FDP) had already announced an agreement on the budget for 2025.
After the agreement, Lindner had already made it clear that there were legal and economic concerns as to whether all the projects envisaged for a solution could be implemented. After two reports had partially confirmed the doubts, the coalition partners rejected the idea of using 4.9 billion euros from the KfW for other purposes in the budget instead of for the gas price cap.
There was also controversy over whether the railway and motorway companies could be supported without this having to be counted towards the debt brake. Lindner and Scholz had different opinions on this, which is why renegotiations were held.
What is the compromise now?
The agreement now announced was made possible by a reduction in the global spending cut (GMA). According to the federal government, this will be reduced by around 4.5 billion euros to around 12 billion euros. In the draft presented in July, the federal government had planned for a reduction in spending of around 17 billion euros.
In total, the traffic light coalition plans to spend more than 480 billion euros next year, almost a tenth of which will be on credit.
What is global underspending?
Basically, it’s about spending cuts, and we don’t yet know exactly where the money will be saved. Global because they are estimated for the entire budget and therefore across all departments. This means that mathematically there is scope for savings without having to agree on specific spending items now.
There is also talk of a dregs GMA because it is assumed that certain budget funds are not fully used or spent – that is, a “dregs” remain because projects are delayed or measures are canceled.
Why are there still gaps?
The coalition of the SPD, the Greens and the FDP is leaving a financing gap of twelve billion euros and is relying on the assumption that part of the 2025 budget will remain unused and can be saved at the end.
Parliament now faces a relatively large task in its deliberations on the budget, because the overall reduction in spending is significantly greater than usual. From Lindner’s point of view, this is not a problem. In July, when presenting the government’s draft, he said: “This is state practice, this is knowledge based on experience, this is serious.”
The Union, among others, sees things differently. The group’s chief budget officer, Christian Haase, said: “This government has once again put on an undignified spectacle. For months it has been dancing around the budget, only to then present something in a second attempt that is still highly questionable in constitutional terms.”
How high was the sediment GMA previously?
With the minimum GMA estimated in the government draft, the traffic light coalition is far exceeding the values of the past 20 years. This is evident from a response from Finance State Secretary Florian Toncar to a query from CSU regional group leader Alexander Dobrindt.
The item has also recently become increasingly important. In the government drafts from 2004 to 2024, no residual GMA was planned for twelve years (2004, 2007-2013, 2015-2017, 2019). In 2018, it exceeded three billion euros for the first time – and then rose to six to eight billion euros in each of the years 2021 to 2023. Eight billion euros were estimated for 2024.
What does this have to do with the railway?
Specifically, according to the government, the infrastructure division of Deutsche Bahn AG is to receive additional equity of 4.5 billion euros – this is to replace the subsidies provided for in the current draft of the 2025 federal budget. In addition, the railway is to receive a loan from the federal government of three billion euros. The debt brake will remain unaffected.
So far, an equity increase of around 5.9 billion euros is planned for 2025, which the railway will use to make investments to renovate the dilapidated rail network.
What does the compromise mean for Autobahn GmbH?
The idea of loans for the federally owned motorway company is off the table. This would require the Autobahn GmbH to have its own income, which it does not currently have.
In general, it would be possible for Autobahn GmbH to receive a portion of the revenue from truck tolls. There was now talk that a “deep debate” was needed for changes to the financing of Autobahn GmbH.
Has the 2025 budget been approved?
No. A federal budget is not decided by the government, but by parliament. The budget makers in the Bundestag usually make a whole series of changes before the decision is made shortly before Christmas – and sometimes even reverse cuts proposed by the government.
Will the traffic light now become the order of the day?
The dispute over next year’s budget has put a strain on the climate of cooperation. This was also evident in the FDP’s recent proposals, for example to wind up the Ministry for Development Aid or to allow more cars into city centers – proposals that were obviously bound to meet with rejection in the coalition.
With information from Lothar Lenz, ARD Capital Studio
