Germany is 17 billion short of the 2024 Budget

German Finance Minister Christian Lindner said on Wednesday that, because of the Constitutional Court ruling that has triggered a budget crisis in Germany, 17,000 of the 450,000 euros planned to be spent will be missing from the public coffers next year.

This is the first time that the government has put figures on the gap left by the Constitutional Court ruling, which this month declared the transfer of 60 billion euros linked to the pandemic to an extraordinary fund to finance the economic transformation null and void.

Speaking to ZDF broadcaster Lindner reiterated that the German state is perfectly capable of meeting expenses such as paying civil servants’ salaries.

“For a government, this is an extraordinarily unpleasant and embarrassing moment,” the minister admitted, however, referring to the setback the ruling has dealt to the policies of the coalition of Social Democrats, Greens and Liberals led by Olaf Scholz.

Germany’s budget crisis, which has forced a revision of the current and next year’s budgets, which were almost ready for approval, has also highlighted the differences between the three partners in the German government.

Lindner’s Liberals call for cuts in welfare payments and subsidies to close the gap in Germany’s budget 2024
Lindner’s Liberals advocate cutting social benefits and subsidies to close the budget gap, while the Greens and Social Democrats argue that the debt brake should also be suspended for 2024.

This mechanism anchored in the constitution aims to limit indebtedness and was already suspended in 2020, 2021 and 2022, first because of the pandemic and then because of the energy price crisis linked to the war in Ukraine.

Following the Constitutional ruling, the affected fund and other similarly constituted extraordinary budgets were immediately frozen by the government, which has presented a supplementary budget for 2023 to provide a legal basis for the uncovered expenditure.

This will force the suspension of the debt brake for 2023 for the time being.

The leaders of the three coalition partners are holding meetings to analyse the situation, although the parties anticipate difficulties in making decisions due to the wide divergence between their positions.