Bundestag Grants Approval to 2024 Federal Budget

In a delayed decision, the Bundestag has finally approved the federal budget for the current year, receiving 388 yes votes and 279 no votes in a roll-call vote on Friday. The budget, backed by the SPD, Greens, and FDP, allocates approximately 477 billion euros in expenditures, with an additional 39 billion euros earmarked for new debts. As it stands, this marks the first compliance with the debt brake outlined in the Basic Law since 2019. The Federal Council is expected to pass the budget on Friday, although its approval is not mandatory.

Originally scheduled for approval in December 2023, the budget faced a setback due to a ruling by the Federal Constitutional Court, forcing the government to address budget shortfalls urgently.

Prior to the budget's passage, the Bundestag approved the government's budget financing law, aimed at legally securing savings measures outlined in the 2024 budget. Notably, this includes controversial subsidy cuts for agricultural diesel. While coalition factions voted in favor, there were some deviations, and other MPs voted against it.

The opposition accuses the traffic light government of inadequate savings, claiming that despite rhetoric, they continue to live beyond their means and criticize the Union. The traffic light coalition aims to increase spending significantly compared to pre-COVID levels, drawing criticism from the Union's chief budget officer, Christian Haase, who described the budget preparation process as audacious.

Finance Minister Christian Lindner defended the plans, asserting that the coalition is demonstrating "design ambition." Lindner highlighted record investments of 70.5 billion euros, particularly in rail, roads, and networks, while simultaneously reducing the tax burden on the population.

This budget financing law marks the second for the 2024 budget. In addition to gradually reducing subsidies for agricultural diesel, it introduces a higher aviation tax, additional sanction options for citizens' benefits, and new regulations for parental benefits. Earlier austerity measures were passed at the end of the previous year through the first budget financing law. The Federal Council was scheduled to discuss the second law later, but Union-led states opposed the expedited timeline due to their rejection of cuts in agricultural diesel.



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