German parliament passes hard fought-over 2024 budget

The German parliament has passed the 2024 federal budget after delays caused by a constitutional court ruling on the country's debt limit and subsequent difficult negotiations within the ruling coalition. Expenditures of around 477 billion euros and new debt of 39 billion euros are planned, which corresponds to the upper limit of the debt brake, reports the Frankfurter Allgemeine Zeitung. Usually, the federal budget is adopted in December ahead of the year it applies to. However, a decision was delayed by the budget crisis sparked in November, when the country’s constitutional court ruled that the plan to transfer 60 billion euros of funds earmarked for the COVID-19 pandemic to a special fund for climate and transformation projects was unlawful. Faced with the challenge of plugging funding gaps for energy and climate programmes, as well as other areas, the government decided to cut spending on various projects by billions of euros, reshuffle funds and create additional income, for example by raising an aviation tax.

Despite the agreement on the budget for 2024, the problem of climate financing has only been solved in the short term, criticises Carolin Friedemann, head of the Initiative Climate Neutral Germany (IKND). "There is no long-term financial policy concept for making Germany fit for the future,” she said. Future generations will bear the financial burden of the rising costs of global warming unless the necessary investments – including in infrastructure – are made now, Friedemann said. Earlier in the week, several NGOs and industry trade union IG BCE had called on the government to make fundamental changes to public financing such as reforming the debt limit to allow for more investments and push the transition to climate neutrality.

One minor hurdle remains for the measures decided by the government: while parliament also passed the Budget Financing Act to put the relevant reforms into law, the Bundesrat (council of state governments) has yet to give the green light. States led by the conservative opposition are delaying a referral as they reject the planned cuts of agricultural diesel subsidies. The next regular meeting of the Bundesrat is scheduled for March 22.