Germany’s Federal Government Presents Ambitious Budget Wishes Amid Record Debt Concerns
Despite a projected record debt, Germany’s new federal ministers, led by Finance Minister Lars Klingbeil of the Social Democratic Party (SPD), have presented a lengthy wish list in the budget negotiations. The list of desired expenditures, covering the period until 2029, exceeds the budget plan prepared by Klingbeil by a “high two-digit billion amount” according to the German newspaper Handelsblatt, citing government and coalition sources. The total amount in question ranges from 40 to 50 billion euros.
The Family Ministry alone is said to have requested a significant increase in funding, in the range of two-digit billion euros. Klingbeil has reportedly already managed to resolve some of the disputes with his cabinet colleagues in personal talks. The finance minister is set to present the budget draft on Tuesday.
The net credit increase for this year is expected to reach a size of up to 100 billion euros, but the final debt level might be slightly lower, according to government and coalition sources. Under the country’s debt brake, Klingbeil can create a debt of around 50 billion euros. The new infrastructure special fund is expected to allocate around 20 billion euros, possibly slightly less and the Bundeswehr special fund will also be used for around 20 billion euros. Additionally, defense and civil protection expenditures are likely to rise by 15 to 20 billion euros this year, according to budget experts.
Criticism has been voiced by the Green Party’s budget spokesperson, Sebastian Schäfer, who stated, “The federal government and the finance minister seem to rely solely on new debt as a panacea. This, however, will not solve the central structural problems in our country.