What the German government wants to spend money on in 2025
Published: Wednesday, Jul 17th 2024, 13:00
Zurück zu Live Feed
The federal budget for 2025, which has long been controversial in the German "traffic light" coalition, has cleared the first official hurdle. The federal cabinet approved the draft and it can now be passed on to the Bundestag.
This marks the "start of the economic turnaround", explained Finance Minister Christian Lindner (FDP). The cabinet also decided on several economic policy stimuli to boost the recent weak growth.
Following the painstakingly achieved budget compromise, Chancellor Olaf Scholz (SPD) emphasized in a Tiktok video that it was the result that counted in the end. Marathon meetings, an all-nighter and fears for the future of the coalition - all seemingly secondary. "It's done now," emphasized the chancellor.
The German government plans to spend more than 480 billion euros next year, almost a tenth of which will be on credit. However, some ideas are still on shaky ground. The budget resolution in the Bundestag is scheduled for the end of November.
The most important figures
The budget has a total volume of 480.6 billion euros. That is around eight billion euros less than this year. The Ministry of Finance reports 78 billion euros as investments - a record level.
Finance Minister Lindner is planning new loans of 43.8 billion euros - also slightly less than this year. According to the Basic Law, the federal government is allowed to borrow this money despite the debt brake. The SPD and the Greens had toyed with the idea of making an exception for higher loans, but the FDP prevailed.
In contrast, more loans are to be taken out in the current year: The cabinet also launched a supplementary budget with 11.3 billion euros in additional debt. This is also possible with a debt brake because the economy is so weak. The money is primarily intended to cover additional requirements for the promotion of green electricity and the citizens' income and compensate for the fact that less tax revenue is coming in.
The focus of the content
With the budget for 2025, the "traffic light" coalition wants to simultaneously boost the economy, maintain social benefits and do justice to the tense international security situation. Defense Minister Boris Pistorius (SPD) will receive additional money so that Germany exceeds the NATO quota of two percent of gross domestic product. The Federal Police, Federal Criminal Police Office and other security agencies will be strengthened with around one billion euros.
In addition, families will be supported by a higher child benefit and a higher child supplement for working parents on low wages. Overall, tax relief of around 23 billion is planned for 2025 and 2026, including through an increase in wage and income tax allowances.
No austerity budget
When it comes to negotiations, Lindner likes to present himself as tough. A balanced budget is only possible "by curbing politicians' appetite for ever higher government spending", he said in a video published by his ministry.
His ministerial colleagues had to learn to limit themselves. "The main task was to bring the individual ministries into line with the so-called financial plan, i.e. what was already planned in advance in terms of state revenue," says Lindner.
In fact, a comparison of the draft budget with the financial plan for 2025 drawn up last year is revealing. It shows that Scholz, Economics Minister Robert Habeck (Greens) and Lindner have not put together such a tough austerity budget. Almost all ministries will ultimately receive more money than they were promised last year.
Transport Minister Volker Wissing (FDP) in particular will be allowed to spend more money, as will Education Minister Bettina Stark-Watzinger (FDP), Interior Minister Nancy Faeser (SPD), Family Minister Lisa Paus (Greens) and Defense Minister Pistorius. Even Foreign Minister Annalena Baerbock (Greens), who reportedly resisted the negotiations for a long time, will receive over 500 million euros more than provided for in the financial plan.
Others will have to make do with roughly what Lindner already wanted to give them last year: the Ministry of Economic Affairs, for example, the Ministry of Development and - with a small minus - the Ministry of Construction.
©Keystone/SDA
German 
English 
French 
Spanish 
Arabic