German finance ministry steps up 2024 budget pressure on ministries

BERLIN, June 2 (Reuters) – Germany’s Finance Ministry has informed the other ministries of what budget funds will be available to them next year, it said on Friday, stepping up the pressure in what has been one of the most difficult government budget negotiations in years.

Budget talks have dragged on as the government’s three parties – Finance Minister Christian Lindner’s Free Democrats, the Social Democrats and the Greens – have widely differing views on how to close a 20 billion euro ($22.02 billion) deficit.

Chancellor Olaf Scholz and Economy Minister Robert Habeck agreed the budget procedure in advance, said the ministry.

The ministries must now determine how to structure their funds under the given ceiling, it added.

The Handelsblatt business daily reported on Wednesday that the finance ministry expects savings from the ministries to be in the high single-digit billions.

Last month, Lindner scrapped a planned June 21 deadline to vote on the budget, saying it was no longer feasible.

Lindner and Scholz both expect the draft budget to now be finalized before the parliament goes into summer recess, according to a ministry source.

The budget needs to be consolidated significantly after massive increases in spending during the coronavirus pandemic and due to higher energy costs as a result of the Ukraine war.

($1 = 0.9084 euros)

Reporting by Rene Wagner
Writing by Miranda Murray
Editing by Friederike Heine

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