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Federal Budget 2025: Olaf Scholz Considers Budget Legally Sound
2024-08-07 19:55:08
Economy
Government

Federal Budget 2025: Olaf Scholz Considers Budget Legally Sound

Image courtesy of : AFP (RALF HIRSCHBERGER)

Chancellor Scholz remains confident in the legal feasibility of investments in infrastructure, despite expert criticism. The financing of the gas price brake and loans to railway and motorway companies has raised doubts among experts.

Increasing the equity capital of the railway could lead to higher track access charges, potentially impacting climate goals. There is a financing gap of around five billion euros, which SPD and Greens politicians accuse Lindner of not addressing.

The budget for 2025 is still missing billions, with discussions focusing on the 'Global Reduction' and the potential use of loans instead of subsidies for the railway and motorway companies. Expert opinions highlight legal and economic concerns.

Scholz and Lindner have conflicting views on the budget, with Scholz stating that the expert opinions support his position. Intensive discussions are currently taking place, but it is uncertain if any changes will be made to the budget before its submission to the Bundestag.

The conflict between the coalition parties remains unresolved, with potential delays and possible legal challenges.

Related news on that topic:

Federal Budget 2025: Olaf Scholz Considers Budget Legally Sound

Despite criticism from experts, Federal Chancellor Olaf Scholz believes that investments in infrastructure are legally feasible. Finance Minister Christian Lindner commissioned expert reports that cast doubt on the financing of the gas price brake and loans for rail and motorway companies. These uncertainties could lead to a shift of traffic to the roads and work against the government's climate targets if the track prices rise. Scholz conceded that there is a funding gap of around five billion euros which, according to the SPD and the Greens, will not be closed by Lindner. SPD leader Saskia Esken is calling for the heads of government to work together to find a solution and present a balanced budget. The CSU criticises Scholz and describes the budget as chaotic. Discussions continue about the funding gap totalling 17 billion euros. Lindner emphasises that the budget must not be unconstitutional and plans to take previous rulings by the Constitutional Court into account. The draft budget will be presented to the Bundestag for discussion in mid-August. Scholz remains confident that the investments can be implemented and emphasises the need to modernise the debt brake in order to cope with future tasks.

Schwesig urges coalition to reach agreement in budget dispute

Mecklenburg-Vorpommern Minister-President Manuela Schwesig (SPD) has urged the coalition to reach an agreement in the newly ignited dispute over the federal budget for 2025. Schwesig emphasized the need for reliability and planning security for the people and economy in Germany. Last week, Federal Finance Minister Christian Lindner (FDP) expressed legal concerns about financing paths for the 2025 budget and called for renegotiations. According to Lindner, there is a gap of around five billion euros that still needs to be closed. Schwesig called on the coalition partners to quickly present a unified budget proposal. Meanwhile, Finance Minister Olaf Scholz reaffirmed payments to the railway and highway company in the 2025 budget, with a legal opinion confirming their legality. The financing will be done through loans or equity increases. However, there are discussions regarding the budget gap and the use of gas price brake funds. The Council of Economic Experts is skeptical, and there are concerns about loan repayment. Economist Veronika Grimm warns against an vulnerable budget and calls for cuts in subsidies, adjustments to retirement benefits, and stronger sanctions in the citizen's income to find the missing billions. The government's neglect of the economy has frustrated businesses and employees, as shown by the budget dispute in the coalition.

Read 6 more recent news on this topic

The press radar on this topic:

DER SPIEGEL
6. August 2024 um 15:37

Federal Budget 2025: Olaf Scholz Considers Budget Legally Sound - DER SPIEGEL

Politics
Finance
Chancellor Scholz considers investments in infrastructure to be legally feasible, despite criticism from experts on the 2025 budget. Finance Minister Lindner had expert opinions prepared, in which the Bielefeld law professor Hellermann and the scientific advisory board expressed doubts about the plans to finance the gas price brake and loans to the railway and motorway companies. An increase in the equity capital of the railway could significantly increase the track access charges for railway..
Tagesschau - Innenpolitik - aktuelle Nachrichten
7. August 2024 um 14:30

Expert opinion on the 2025 budget - What the budget dispute is about

Politics
Finance
Economy
As of August 7, 2024, 4:30 pm Considerations to plug the holes in the budget through accounting maneuvers and higher debt are causing a rift in the traffic light coalition - and a clear statement from the Chancellor towards the Finance Minister. What is it about? By August 16, the federal government wants to submit the final budget plan for the coming year to the Bundestag. Actually. But there is still a gap in the 1,437-page draft. Why are there still billions missing in the budget? After much..
DER SPIEGEL
7. August 2024 um 18:32

Federal Budget: Olaf Scholz against Christian Lindner - Who is right? - DER SPIEGEL

Politics
Economy
Chancellor Scholz and Finance Minister Lindner have different views on the budget and spending money, which they represent based on expert reports. To use SPIEGEL+ outside the app, you have to link the subscription with a SPIEGEL-ID account and accept the terms of use and privacy policy. The digital offering of SPIEGEL is subscribed by more than 400,000 people. The link that was sent is either older than 30 days or the article has already been opened 10 times.
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