A new budgetary shortfall has emerged in the planning for 2025. The upcoming federal government is expected to be short of an additional 3.4 billion euros, which the previous government had planned for in its budget for 2025, according to the “Spiegel”.
The shortfall primarily consists of the return of energy aid funds from the now-closed economic stabilization fund, amounting to 2.9 billion euros, as well as 300 million euros in Corona emergency funds and 200 million euros in Corona business aid. In contrast to the previous government’s assumption in the summer when the budget was being prepared, these returns cannot be used in the regular budget. This is because the aid was financed with emergency loans, which exempted the budget constraints.
A ruling by the Federal Constitutional Court in November 2023 made it unlawful to use such loans for regular expenditures that are not related to the reasons for which the emergency loans were taken out. This would be the case if the returns were now used for the budget. Instead, the new federal government must use the money to prepay the emergency loans.
A similar approach was taken by Finance Minister Jörg Kukies (SPD) in late 2024, when 8.5 billion euros in aid returned. According to a breakdown by the Federal Ministry of Finance, 6.3 billion euros of these returns were from the economic stabilization fund, which included, among other things, remaining aid from the gas price brake. 1.4 billion euros came from support for companies from the Corona era and 0.8 billion euros from pandemic emergency funds. The returns from 2024 and 2025 will serve as a kind of early repayment for the emergency loans from the Corona era and the early phase of the Ukraine war. They total around 335 billion euros, which would have been repaid from 2028 to 2061.
The early repayments will now lead to the debt being repaid earlier than planned. The missing funds will further enlarge the budget deficit for 2025, which, according to Chancellor Olaf Scholz (SPD), was initially 26 billion euros, but now stands at almost 30 billion euros.