German budget cuts hit international aid, rail freight transport, cycle paths

The German government plans to cut development aid and funds earmarked for rail freight transport and cycling paths as part of saving measures in response to the country's budget crisis, according to media reports. Funds for international commitments will be cut by 800 million euros in 2024, which could affect programmes including bilateral cooperation, newsletter Table.Media reported. This includes investments worth 200 million euros in climate protection and biodiversity. The finance ministry also announced plans to cut over 44 million euros from a special urban and rural programme that included investments in cycling infrastructure, while a funding programme for bicycle parking facilities at train stations will be suspended, reported Frankfurter Allgemeine Zeitung. Support for rail freight transport is set to be cut by around 300 million euros, reported Handelsblatt, including support for the construction of freight railway facilities and funding for track construction. Associations including railway lobby group Allianz pro Schiene and the German Road Safety Council (DVR) criticised the cuts respectively, saying they contradicted the coalition's bid to green the transport sector. "If savings are now to be made on creating accessibility and bicycle parking facilities at railway stations, the federal government will fall back into old roles and make it much more difficult to switch to rail travel," Allianz pro Schiene head Dirk Flege said.

With the publication of the draft 2024 budget adjustment bill by Germany's finance ministry on 10 January, the government clarified how and where the budget will be cut to implement the savings that had become necessary on the heels of a recent ruling by the constitutional court. However, lawmakers could still amend the proposal, and are set to decide by early February. The court's verdict left the government short of 60 billion euros in the special Climate and Transformation Fund (CTF), set up to finance energy transition projects outside of the regular budget. The government had already announced a list of budget cuts in December 2023, including an earlier end to the country's electric vehicle support, as well as to some funding earmarked for solar PV expansion. While the government cut 45 billion euros in the CTF by 2027 (12 billion euros less in 2024), additional cuts were needed to fill the financing gap left open for this year.