German coalition govt set to reopen 2025 budget talks following advisor doubts

Germany's coalition government is set to reopen budget negotiations after advisors to the finance ministry cast doubts on a draft agreement on a budget for 2025, finance minister Christian Lindner told broadcaster ZDF. "In my estimation, the order of magnitude we are still talking about is around five billion euros," Lindner, from the pro-business party FDP, said. He added he wanted to revise the budget to prevent it from failing again before the country's top court: "That won't happen to me a second time," he said.

At the release of its budget plans in July, which followed weeks of difficult negotiations, the cabinet of chancellor Olaf Scholz said the agreement included “record” investments in climate and transformation efforts. However, experts commissioned by treasurer Lindner said that the draft agreement’s plans to close funding gaps could once again violate constitutional rules.

In November 2023, Germany's top court declared that re-directing unused funds from the covid pandemic to a "climate and transformation fund" and was unlawful. The ruling opened a debate on the need to reform the constitutionally enshrined limit on new government borrowing, the so-called debt brake. The Social Democrats (SPD) and Greens would like to relax or suspend the debt brake, saying that the commitment does not fit current needs and challenges, while the FDP rejects the idea. The draft budget must be passed on to parliament for further negotiations and a final decision on the funding plans is due in November.