The austerity budget for 2024 launched by Germany’s liberal, pro-business Federal Finance Minister Christian Lindner (FDP), which will cut spending for the next year by €30.6 billion and affect healthcare, childcare, and public transportation, has revealed stark divides within the ruling ‘traffic light’ coalition and prompted infighting between the governing parties.
The prescribed budget cuts for 2024, according to both Lindner and Scholz, were inevitable in light of the massive public debt incurred first by the COVID-19 pandemic and then by the energy crisis precipitated by the EU’s sanctions against the Russian Federation following the onset of the war in Ukraine.
Lindner added that the austerity course is imperative to comply with the ‘debt brake’ that limits government spending and restricts borrowing, writing on Twitter: “We are only at the beginning of the fiscal turnaround. We need to free the state from debt without burdening people and businesses with more taxes.”
The plan, which cuts far more than the €18 to €22 billion that Economy Minister Robert Habeck had initially mentioned in May, and comes as some economists claim Germany has fallen into a recession, has revealed fissures between Chancellor Olaf Scholz’s Social Democrats (SPD), the Greens, and Lindner’s Free Democratic Party (FDP).
Scholz, on Wednesday, July 5th, defended the budget cuts during a question-and-answer session in the Bundestag, saying, “The budget is of course challenged by the fact that many have become accustomed in recent years to the large spending.” However, he continued, “We will now again draw up budgets that do not attempt to combat crises with these additional credit-financed funds, but that are geared very specifically to the future of our country.”
Especially agitated by significant slashes to the budget are the left-liberal Greens, whose party member Lisa Paus heads the Federal Ministry for Family Affairs, Senior Citizens, Women, and Youth. Paus and her fellow Green party members are opposed to the plan, which halves the income limit for parental allowance, from 300,000 euros to 150,000 euros, insisting that it will have “considerable consequences in terms of equality policy.”
The Greens say the cuts will unfairly and disproportionately affect women, arguing that they will increase the burden of childcare on them.
The FDP minister responded by saying: “If the colleague responsible is not convinced of the change in parental allowance, then she can and should make her consolidation contribution in another way.”
The CSU/CDU Union faction in the Bundestag also massively criticized the planned cut to parental allowance, with Mario Czaja, the secretary-general of the CDU calling the plan a “slap in the face of working parents that creates de facto a two-class society among hard-working families.”
