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German budget chaos: No vote on 2024 spending this year

December 7, 2023

German Chancellor Olaf Scholz's SPD no longer expects the 2024 federal budget to be passed this year, but a political agreement among Germany's governing parties could be reached in the coming days.

German Chancellor Olaf Scholz, Economy and Climate Minister Robert Habeck and Finance Minister Christian Lindner listen to a debate about Germany's budget crisis at the parliament Bundestag in Berlin, Germany
Olaf Scholz (rights), Robert Habeck (center) and Finance Minister Christian Lindner must find a way out of Germany's budget crisisImage: Markus Schreiber/AP/picture alliance

The German parliament will not have time to vote on the country's 2024 budget before the end of the year, a senior lawmaker from Chancellor Olaf Scholz's Social Democrats (SPD) wrote in a text message sent to the party members and seen by several news agencies on Thursday.

"Although we have done as much as possible from our side, the budget for the year 2024 can no longer be finalized in time this year," wrote Katja Mast, a senior SPD lawmaker.

However, Mast added, referring to discussions in the party leadership that Scholz "is confident that a result can be achieved in the coming days."

German government announces special budget

Search for the solution to the budget crisis

Scholz's three-party coalition with the environmentalist Greens and business-focused FDP is under huge pressure to resolve the country's budget crisis, which followed a landmark court ruling that struck down some of the government's spending plans.

Now the coalition has to find a solution for the 2024 budget, which is €17 billion ($18.3 billion) short.

Scholz is currently negotiating with Vice Chancellor Robert Habeck (Greens) and Finance Minister Christian Lindner (FDP). The talks are to continue on Friday. The SPD and Greens want the so-called debt brake to be suspended again, which the FDP rejects.

The SPD said it expected at least one meeting of the budget committee before Christmas to work out the details of the budget. Government spokesman Steffen Hebestreit said on Wednesday that he expected a Cabinet decision before Christmas.

The problem is, even if a deal is reached, there will not be time for the financial plans to go through parliament this year.

Lindner downplays budget emergency

"This is however not a crisis," German Finance Minister Christian Lindner said, playing down the need to get the budget through parliament before the end of the year. 

"I have realized that the coalition partners have very ambitious timetables," Lindner said on Thursday in Brussels. 

He said that a political agreement on the structure of next year's budget was likely to come in a couple of days. "The work has not yet been fully completed," Lindner added.

If no agreement is reached, the coalition could collapse, but most observers say it is in the interest of all parties to reach an agreement and stay in power. A temporary budget for next year could be implemented if no agreement is reached.

dh/sms (dpa, AFP, Reuters)

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