BERLIN: German Chancellor Olaf Scholz on Saturday firmly rejected any cuts on social benefits as his crisis-mired coalition struggled to agree on a budget for 2024.
Germany is in the throes of a budget crisis after a bombshell court ruling last month on debt rules upended the government’s spending plans.
The constitutional court’s ruling sets a “very difficult task” for the government, said Scholz at his Social Democratic Party’s (SPD) congress.
As he battles to clinch a deal with coalition partners the Greens and liberal FDP party, Scholz underlined that he would not accept welfare reductions.
“In such a situation, there will be no cuts on the welfare state in Germany,“ he said.
The chancellor did not provide any detail on the talks, but said he wanted to “convey the confidence that we will succeed” in getting a deal.
Germany’s top court found that the government had broken a constitutional debt rule when it transferred 60 billion euros ($65 billion) earmarked for pandemic support to a climate fund.
The ruling blew a huge hole in spending plans, forcing the government to adopt an emergency budget for 2023, and sending it scrambling for a new plan for 2024.
Current projections show that the coalition needs to make up a 17-billion-euro gap, and the opposition conservatives, as well as Scholz’s junior coalition partner FDP, have demanded reductions on welfare spending.
One point of friction between the coalition parties concerns the debt brake rule, which is enshrined in German law and prevents the state from borrowing more than 0.35 percent of annual GDP to cover a structural deficit, barring exceptional circumstances.
The FDP rejects any further suspension of the debt brake.
But in the midst of the budget crisis, the SPD is calling for this constitutional rule to be suspended again in 2024 — as it has been since 2020 — to allow for more spending, according to a resolution adopted unanimously at the party congress.
Economy Minister Robert Habeck of the Greens has meanwhile said he wants “all projects that we have conceived” to go ahead.
Amid the standoff, Scholz’s SPD parliamentary group admitted earlier this week that it would no longer be possible for parliament to adopt 2024’s budget this year.
But Scholz and his coalition partners are still striving for a political deal by year’s end, which could then be put to parliament in early 2024. –AFP
