Federal Finance Minister Jörg Kukies (SPD) is apparently assuming rapid coalition negotiations after the federal election on February 23rd. He hasn’t said anything like that publicly. But on Monday his department sent the circular to the ministries containing the regulations for the provisional budget management.
Accordingly, from January 1st, the ministries can provisionally spend 45 percent of the funds provided for in the draft federal budget for the coming year. So just under half – which is usually enough for half a year.
This suggests that the red-green minority government expects a final budget decision from the Bundestag and Bundesrat by the summer. The basis of the provisional budget management is the existing traffic light government draft.
You can see videos about the traffic light parties here
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But because a completely new legislative process must be started after the election, which is likely to take at least two months, the new budget would probably have to be approved by the new cabinet at the beginning of May at the latest. The coalition negotiations are unlikely to begin in earnest before the end of March.
When is the next government?
So it’s a very optimistic assumption to actually have a budget before the summer. But the Ministry of Finance assumes that it will be possible to get the final vote in the Federal Council at its meeting on July 11th. According to budgetary circles, the coalition negotiations would then have to be conducted very tightly. There is also talk of an ambitious schedule in the Ministry of Finance.
Kukies and the red-green minority cabinet could also have used the 2024 budget as the basis for the provisional budget management. After all, it was decided by Parliament. But the decision for the unresolved draft budget for 2025 is legally in order. Neither Article 111 of the Basic Law, which sets the framework, nor the other budget regulations restrict a government in this regard.
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However, this draft was already submitted unfinished by the cabinet to the Bundestag last July. The dispute over the gaps that were not closed led to the collapse of the traffic light coalition. In particular, the plan to cover part of the hole through a global shortfall in spending (GMA) amounting to twelve billion euros was met with clear constitutional doubts from the experts at the Budget Committee hearing.
The traffic light wanted to push this GMA below ten billion euros, but that was no longer possible. With a GMA, the final decision on specific spending planning can practically be postponed to a later date.
Unfinished draft
In addition, the Budget Committee had not yet dealt with some departmental budgets when the coalition collapsed on November 6th. The provisional budget management is therefore based on a still unfinished draft.
However, it is important for citizens that despite the delay until a regular budget is approved, all important expenses can be paid – even beyond the federal election and theoretically even until the end of 2025. All legal obligations must be adhered to.
This includes not only social benefits such as citizen’s benefit, but also child benefit payments and other cash benefits. This also includes the subsidy from the federal budget to the pension insurance.
Funding programs that have been started will be continued. This also applies to investment measures that have been initiated. However, the red-green minority government cannot initiate new projects. And when it comes to personnel expenses, it is even tied to the budget for 2024, as the provisional budget management rules stipulate.
If the coalition negotiations take longer next year and the new budget is not ready until after the summer, that will not be a problem, at least from a legal point of view. Kukies can expand the spending cap, which is now 45 percent of total funds, at any time – depending on the situation.
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