The fat years are over.
After a decade of spending increases, the German government on Wednesday adopted plans to cut its budget for next year by €30.6 billion, affecting areas from health to childcare and public transport — sparking fierce political battles within the governing coalition and across the political divide.
Ballooning public debt from the coronavirus pandemic and the energy crisis triggered by Russia's war in Ukraine meant that drastic cuts were now unavoidable, Finance Minister Christian Lindner said. He insisted the country would return to stricter fiscal policies that respect the country's constitutionally enshrined debt brake that limits spending.
"We are only at the beginning of the fiscal turnaround," Lindner said. "We need to free the state from debt without burdening people and businesses with more taxes."
Declining tax income and data last month showing that Germany has fallen into recession have further reduced Lindner's room for maneuver. The cuts will affect all government ministries except those of defense and labor and welfare.
The plans have already led to fierce rows between politicians from the three-party ruling coalition of Chancellor Olaf Scholz's Social Democrats (SPD), the Greens and Lindner's Free Democratic Party (FDP).
Scholz came out fighting on Wednesday. "The budget is of course challenged by the fact that many have become accustomed in recent years to the large spending," he told lawmakers in Berlin. But "we will now again draw up budgets that do not attempt to combat crises with these additional credit-financed funds, but that are geared very specifically to the future of our country,” Politico reports.
