Germany: government ends row over budget
After a fierce struggle, the German government has agreed on a new budget for 2024. The 17-billion-euro gap left by a Constitutional Court ruling is to be plugged with cutbacks in areas such as the expansion of renewables, without taking on additional debt. Is this budget workable?
FDP is boss in coalition government
The Tages-Anzeiger sees the liberals as the winners:
“Looking at the compromise as a whole, it allows all the coalition parties to save face to some extent - but the liberal FDP can allow itself a grin: the austerity programme of its leader Christian Lindner has prevailed against the spending wishes of his Green and left-wing partners. Scholz didn't have much choice: he is only chancellor because the FDP was prepared to enter this coalition - and it can only continue to exist with their support.”
Not future-proof
The agreement is a victory for the FDP, writes the taz:
“For the time being, it has managed to ensure that the debt brake won't be touched. Instead, cuts will be made to the federal budget and climate investments in 2024. ... This is tragic, because the Germans are ruining their own future. Debt is vital to finance investments. The state can't act like a piggy bank and start putting money aside now. As soon as you switch to austerity, demand drops - and the economy collapses. But this argument doesn't work with the Germans.”
Unnecessary austerity
An immediate crisis may have been averted, but the debt brake needs to be radically revised, says The Guardian:
“The fix will lead to an entirely unnecessary round of austerity in the middle of a sharp economic downturn. It could also undermine Germany's - and by extension Europe's - climate and energy transition and its economic recovery and restructuring. ... A better alternative ... would be to open a frank political conversation about reforming the debt brake altogether. Even conservative political leaders are starting to realise that it is becoming untenable.”