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Germany’s ruling coalition still has a lot of work ahead amid difficult deliberations on the 2025 federal budget, Finance Minister Christian Lindner said on Saturday, as left-wing politicians criticized prospective cuts to social spending.
“We have not yet reached the landing zone,” the minister told the Neue Osnabrücker Zeitung newspaper. It is “not just about a draft budget for next year … but also about a fundamental turnaround in [Germany’s] economy,” Lindner stressed.
“Redistributing state money and subsidies do not create added value,” added Lindner, a fiscal conservative who holds to a tougher line than his coalition partners.
In addition, the state must limit itself to achieving its core tasks, he said. “In this respect, a stricter focus offers the opportunity to place more emphasis on very important projects in education, digitalization, infrastructure and security,” emphasized Lindner.
The three-party German coalition of Lindner’s pro-business Free Democrats (FDP), Chancellor Olaf Scholz’s Social Democrats (SPD) and the Greens had planned to present a draft budget on July 3, but Lindner has indicated that the draft could be presented later.
Government spokesman Steffen Hebestreit said the budget needed to be completed before Scholz attends a NATO summit in the United States on July 9. He said Scholz is confident that he “will travel to Washington with a draft budget in his briefcase.”
Lindner, Scholz and Economy Minister Robert Habeck of the Greens have been locked in negotiations over the budget.
A number of government ministries have said they cannot meet strict savings targets, but Lindner is insisting that Germany’s “debt brake” on government spending must be kept.
SPD leader Saskia Esken previously warned Lindner against an overly rigid austerity programme, which she said would amount to a “historic mistake.”
Lindner responded on Saturday by saying Esken should recognize that “prosperity must be generated before it can be distributed,” arguing that social benefits have been extended by €13 billion ($14 billion) since 2022. However, he said the country is lacking economic growth and cannot continue on the same course.
The latest comments were met with criticism from Lindner’s coalition partners on Saturday.
Labour Minister Hubertus Heil of the SPD said on public radio that “it would be wrong to cut back on labour market policy in times like these,” highlighting the need to ensure workers have necessary skills for employment.
Meanwhile, left-wing SPD members submitted a petition to the party leadership calling for no cuts to be made in the budget on social spending, health and education.
“An austerity budget would be a wrong turn in economic, environmental and democratic terms,” the document said.
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