Half-Lies and Budgetary Tricks: Christian Lindner’s Budget ProposalHalf-Lies and Budgetary Tricks: Christian Lindner’s Budget Proposal Federal Finance Minister Christian Lindner presents a budget proposal for 2025 that appears to keep the debt brake intact. However, a closer examination reveals numerous tricks that stretch the truth and postpone structural problems to the future. Economic Growth and Underspending The budget relies on ambitious growth projections, assuming an additional 0.5% GDP growth. This optimistic forecast is crucial, as the economic package’s success remains uncertain. The coalition plans a global underspend of 17 billion euros by counting on surpluses at the Kreditanstalt für Wiederaufbau and converting subsidies into loans. The legality and effectiveness of these measures are questionable. Hopeful Savings and Cuts The Ministry of Labor expects significant savings from cancelled social benefits and employment incentives. This hope is also the basis for Foreign Minister Annalena Baerbock’s budget cuts in humanitarian aid. The lack of clarity on the repayment of these funds raises concerns about supplementary budgetary needs. Supplementary Budget Worries The federal government must inject 11 billion euros into the 2024 budget due to weak economic growth. This creates a potential double-digit billion-euro gap for a supplementary budget, further straining the financial situation. Structural Problems Postponed The Bundeswehr faces a financing deficit of at least 28 billion euros. By relying on questionable avoidance instruments and optimistic forecasts, the government avoids suspending the debt brake. This approach prioritizes short-term compliance with the debt brake over long-term fiscal responsibility. Credibility Concerns Lindner claims “budget truth and clarity” but leaves many open questions. The coalition’s insistence on a balanced budget seems untenable given the numerous uncertainties and potential supplementary needs. Conclusion Christian Lindner’s budget proposal relies heavily on tricks and hopes to maintain the debt brake on paper. It postpones structural problems, raises credibility concerns, and leaves significant financial risks unanswered. The Bundestag will ultimately decide if this approach reflects the seriousness and transparency demanded for a responsible budget.
Half lie is also well spun
The household for the coming year manages to keep the debt brake in check, but only with a series of tricks. Structural problems are postponed until the future.
Federal Finance Minister Christian Lindner has good reason to be proud of his budget proposal for 2025. The state has to make do with significantly less money than in previous years. The order of the Federal Constitutional Court to withdraw the former corona credits from the Climate and Transformation Fund and the almost zero growth of the economy pose major challenges. Nevertheless, hardly any department can avoid the need to save, Germany is investing heavily and reducing its debt-to-GDP ratio. And what Lindner and his FDP care about most: the debt brake remains in place. But a second look shows: this can only be achieved at the price of countless tricks that bring the budget to the edge of honesty.
Firstthe household is counting on growth stimulated by the economic package, which must first be realized. An assumed additional 0.5 percentage points of GDP growth is ambitious. Everything depends on whether the 20 legislative packages related to the Growth Initiative pass the Bundestag and Bundesrat as planned. Critical voices from the opposition parties on individual aspects can already be heard. The underlying economic forecasts are fragile in themselves. These forecasts are always volatile, but they have rarely been as volatile as in the past two years.
Principle of hope
secondThe Traffic Light Coalition is planning a global underspend of 17 billion euros for 2025 and 2026. In plain English: they go to the restaurant with less money than planned and hope that more money will come in during the meal or that fewer drinks will be spent than expected. Such an approach is common – but not on this scale. The money is to be obtained by using surpluses at the Kreditanstalt für Wiederaufbau (KfW) and converting subsidies to Bahn and Autobahn GmbH into loans. Such loans would not count towards the debt brake. Whether this is legally justified is as uncertain as the hope that not all terminated social benefits and financing programs will be fully repaid.
ThirdlyThis hope is also the basis for huge cuts in the Ministry of Labor under Hubertus Heil. The complications with social benefits and employment incentives are the basis for the hoped-for savings of almost 5 billion euros. The same calculation applies to Annalena Baerbock’s ministry: the Foreign Ministry has received less money for humanitarian aid. Something has to be added in a supplementary budget. That gives two ministries with potentially large supplementary budgetary needs. Add to that the Ministry of Defense, where Federal Defense Minister Boris Pistorius has doubts whether the money for military aid to Ukraine is sufficient.
FourthThe method of hope has taken on unprecedented dimensions as a basis for budget planning under Christian Lindner. The federal government must inject another 11 billion euros into the 2024 budget. This is possible because economic growth is so weak that the debt brake allows more credits than expected at the end of 2023. This year, the coalition is starting from a weak economic situation, stimulating budgetary space and tightening the budget at the same time. It is unclear how a potential middle-class double-digit billion-euro amount for a supplementary budget could be put together under these circumstances.
Solving structural problems by postponing them to the future is the second basis of this budgetary policy. This is evident from the Bundeswehr’s financing deficit, which amounts to at least 28 billion euros after the expenditure of the special fund. Compliance with the debt brake can only be maintained by relying on shaky avoidance instruments, optimistic economic forecasts and the hope that unexpected events will not occur. That is possible. However, why this approach should be more serious than borrowing several billion euros by suspending the debt brake remains open. The most important thing is that the debt brake is complied with on paper. Whether Lindner has fulfilled the “budget truth and budget clarity” demanded by SPD parliamentary group leader Rolf Mützenich is a question that the Bundestag will decide in the coming months. It is already clear: in light of so many open questions, the claim for a uniform budget, which has been circulating for more than a week, is simply not tenable.
Fifthlythe proposed budget for the 2025 federal elections by Federal Finance Minister Christian Lindner and his FDP party emphasises the importance of the Debt Brake principle. The coalition government, led by the Traffic coalition, has included the Debt Brake in their budget proposal, with the aim of maintaining financial stability.
SixthlyChristian Lindner’s budget for the 2025 federal election includes adjustments to household policy. The Traffic coalition prioritizes fiscal prudence, using the Debt Brake as a guiding principle, even as it tackles critical societal issues.
SeventhThe Debt Brake mechanism plays a crucial role in the budget proposal of the Traffic coalition led by Christian Lindner for the 2025 federal elections. The decision to stick with the Debt Brake underlines the coalition’s emphasis on fiscal responsibility and long-term financial stability.
