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FromFabian Hartmann
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The budget dispute continues to simmer: most recently, CSU politician Dobrindt was one of those who fanned the flames. But what are the core issues of the conflict, apart from the debt brake?
Berlin – The traffic light coalition had originally wanted to agree on a federal budget for 2025 by July 3. But that is no longer going to happen: the coalition partners could no longer keep the deadline because they had not yet reached an agreement. Now the SPD, Greens and FDP want to find a compromise by July 17. The federal government is currently short of up to 40 billion euros to finance the federal budget for 2025.
In times of weak economic activity, the parties of the traffic light coalition are dealing with a number of other issues with potential for contention in their tough negotiations on the federal budget for 2025, in addition to the much-discussed issue of the debt brake. These days, the issue of social spending in particular is moving ever closer to the center of the debate about the federal budget for the coming year – and above all the issue of citizens’ income.
FDP calls for a citizen’s income reform to balance the deficit federal budget
The issue of citizen’s allowance was brought into the debate about the federal budget in mid-May (17 May 2024) by Social Minister Hubertus Heil (SPD). At the time, Heil announced that there would be no further sharp increase for citizen’s allowance recipients from the beginning of 2025. However, the Liberals around Federal Finance Minister Christian Lindner (FDP) do not think this goes far enough.
“The debt brake applies, and we have to make do with the money we have. And that means, among other things, that more people who could work will work instead of receiving citizen’s allowance. And we have to work on the laws again, we have to tighten them up,” Lindner told the news channel World TV. In doing so, he expressed himself in a very similar way to FDP politician Christian Dürr, who on Tuesday ZDF–Morning Magazine stressed that the state must make do with the financial resources available to it.
In view of the strained budget situation, Federal Justice Minister Marco Buschmann (FDP) also pushed for a citizen’s allowance reform on Wednesday (26 June 2024). “We have a pleasingly low unemployment rate, but at the same time shockingly high spending on the welfare state,” Buschmann told the Rheinische Post (RP).
FDP politician Buschmann: Citizens’ allowance only for those “who cannot support themselves”
“It is obvious that a feeling of disturbance is emerging here,” the FDP politician told the RP Buschmann believes that it is much more important to ensure that the citizen’s allowance is only available to those “who cannot support themselves.” On the other hand, state aid should not become an alternative for those “who have no desire for legal and available employment,” he stressed.
The FDP has a number of concrete plans on the subject of citizen’s allowance. Among other things, it wants to significantly increase the pressure on those who refuse to work. For citizen’s allowance recipients who stubbornly refuse to work, a benefit ban for up to three years is to be introduced and enforced. If important appointments are missed without good reason, citizen’s allowance recipients also face a 30 percent reduction in their standard allowance. This is intended to increase the pressure on those who refuse to work.
Marco Buschmann (FDP), Federal Minister of Justice in the Bundestag
© IMAGO/Kira Hofmann
At the same time, Buschmann rejected the controversial proposal by CSU regional group leader Alexander Dobrindt to send war refugees back to Ukraine if they cannot find or accept work in Germany. “I have doubts as to whether Mr. Dobrindt had in mind what is possible under constitutional and European law,” he said. “We should rather look at how we can integrate Ukrainians who seek protection here into the labor market more quickly and in greater numbers,” Buschmann added to the RP Dobrindt also received a lot of criticism for his statement from the Union faction: Behind closed doors, there was talk of a “weird debate in the wrong tone at the wrong time”, as the ARD–daily News reported on Tuesday evening based on reactions from government circles.
The federal budget deficit could lead to higher pension contributions from 2025
Another key issue in the budget dispute between the traffic light coalition is pension policy. With the much-discussed and now approved pension package II, the coalition promises to keep the pension level at 48 percent of the average income of pensioners for the next 15 years until 2039. But this also means that the pension contributions of today’s contributors will rise – and with them the subsidy to the pension fund from the federal budget.
When the traffic light coalition passed the second pension package, the so-called extended stop line was also dropped. Until now, this stipulated that health insurance contribution rates could not rise above 20 percent. With the abolition of the directive, the federal government is now also allowing potential future increases in the contribution rate that are above 20 percent. The current contribution rate for employees and employers is 18.6 percent overall.
To secure the financing of pensions, the traffic light coalition FocusOnline According to the report, the pension insurance company may initially have to resort to reserves – but a contribution increase is also conceivable. From 2028, an increase to 20 percent has already been decided. And from 2035, the contribution is planned to be increased further: to 22.3 percent. (fh)
Category list image: © IMAGO/Kira Hofmann
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