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Germany to trim overall budget in 2024 as it invests more in defence

Germany plans to cut spending and borrowing substantially next year following massive outlays during the coronavirus pandemic and energy crisis, a draft of the budget showed Monday.

Published: 3 July 2023 17:22 CEST

A sign reading

A sign reading "Ministry of Finance" stands in front of the Ministry of Finance of Baden-Württemberg. Photo: picture alliance/dpa | Sebastian Gollnow

But the defence budget will hit a record high, and is expected to reach the two-percent NATO spending target, as Berlin invests in overhauling the military in response to Russia’s invasion of Ukraine, it showed.

There have been drawn-out negotiations in the three-party ruling coalition over the budget due to cost cuts demanded by Finance Minister Christian Lindner, from the pro-business FDP party, but the cabinet is finally due to approve it Wednesday.

READ ALSO: Germany approves funds to buy nearly €4 billion air defence system

Europe’s biggest economy, which fell into recession at the turn of the year, is forecasting spending in 2024 of €445.7 billion, compared to €476.3 billion planned for this year.

The reduction in new borrowing is even more drastic, with €16.6 billion planned for next year compared to €45.6 in 2023.

Germany should thus comply with its constitutional “debt break” which limits new annual borrowing to 0.35 percent of gross domestic product a year, according to the draft.

After being suspended from 2020 as Germany spent huge sums to tackle the coronavirus crisis, the budget rule came back into force this year.

But to ensure that the 2023 budget complied with the debt break, the government has had to resort to creating several special funds that are outside the official budget.

They have been used in particular to help households and businesses cope with rising energy prices after Russia slashed crucial gas supplies to Europe amid the Ukraine war.

The government will tap one of these funds to ensure it hits the NATO spending target in 2024, according to the draft budget.

A sum of €51.8 billion will form the regular defence budget, a new high after about €50 billion in the 2023 budget.

There will be an additional €19.2 euros from a special, 100-billion-euro pot for the military that Chancellor Olaf Scholz established after the start of the Ukraine war.

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How much do you need to earn to qualify for citizenship in Germany?

Out of the requirements for qualifying for a German passport, supporting yourself financially is one of the most important – and one of the most confusing.

Many foreigners assume that the authorities have a magic number in mind and will often worry about whether their income is above or below this threshold.

In reality, though, the law is much more flexible. In section 10 of the nationality law, it states that applicants must show that they “can support themselves and their dependent family members without claiming benefits under the Second or Twelfth Book of the Social Code.”

In other words, that your income is healthy enough to not rely on the state for things like long-term unemployment benefits.

According to Fabian Graske, an immigration lawyer at Migrando, around €1,500 gross per month for a single person is usually considered enough to live on.

That said, there isn’t really a one-size-fits-all approach to this quesiton.

When it comes to working out if your income is high enough, you’ll need to take into account a number of factors that your case worker at the naturalisation office will also weigh up.

That’s why it’s important to ask yourself a number of questions that go beyond just how much you earn:

How high are your living costs?

In Germany, there are huge regional differences in the cost of living, so what someone can afford to live on varies hugely from place to place.

For example, someone living in pricey Munich is likely to need much more money for rent or their mortgage than a resident of much more affordable places like Halle or Leipzig, so you should consider whether what you earn is enough to offer a basic standard of living in the city or town you live in.

READ ALSO: Requirements, costs and permits – 6 essential articles for German citizenship

It is worth mentioning, though, that what you actually pay for rent and bills matters more than the averages. If you’re lucky enough to find an apartment with unusually low rent in Berlin, for instance, you can probably get away with earning less money as well.

Are you single or do you have a family?

If you’re single and have no children, you’ll likely get a lot more lenience from the authorities when it comes to having a lower-than-average income.

A family sit at a lake.

A family sit at a lake in Bavaria. Image by Eva Mospanova from Pixabay

Of course, if you have dependents such as kids or a spouse who doesn’t work (or both), you’ll need to ensure not only that your own living costs are taken care of, but also that your family can survive on your income alone.

That naturally means you’ll be expected to earn a certain amount more for each dependent child or adult.

On the plus side, any income your spouse does earn will be counted alongside your own, so if you’re the one who is supported by their partner, the authorities will also take this into account.

Is your job stable or unstable?

One key thing to think about when applying for citizenship is the security of your work contract. Someone who has a long-term contract with an employer and has passed their probationary period will be in a much better position than someone who is still on a three-month trial, for example.

This doesn’t mean you shouldn’t submit a citizenship application after just starting a new job, but be aware that the authorities may well wait to process your application until you’ve passed the initial probation and have been put onto a longer-term contract.

A similar rule of thumb applies to people who are currently claiming Arbeitslosengeld I (ALG I), or unemployment insurance. Though this doesn’t disqualify you from citizenship, it may delay your application until you can find a stable job.

READ ALSO: Can I still get German citizenship after claiming benefits?

Do you need to rely on welfare payments to get by?

A key aspect of German naturalisation law is working out whether you’re likely to be a financial burden on the state by relying too much on the welfare system.

The entrance to the Jobcenter in Düsseldorf,

The entrance to the Jobcenter in Düsseldorf, North Rhine-Westphalia. Photo: picture alliance/dpa | Oliver Berg

While everyone needs a helping hand from time to time, claiming benefits like long-term unemployment benefit (Bürgergeld) or housing benefit (Wohngeld) to top up your income sadly shuts you out of the naturalisation process and could also make it hard for you to qualify in the future.

Luckily, this doesn’t apply to all types of state support – Kindergeld, ALG I and Bafög don’t count, for example – so seek advice from a lawyer or your local citizenship office if you’re unsure.

How old are you?

Though this is hard to fully quantify, age can sometimes play a role in assessments of your financial fitness in Germany.

A young person fresh out of university or vocational college may be seen as someone with high earning potential over the years, so in some cases the authorities may take a more relaxed approach to their current income.

In contrast, an older person coming to the end of their working life could be held to slightly stricter standards.

This is also why it can be important to show that you have sufficient pension contributions or another form of security for the future, such as owning your own home or having lots of savings.

READ ALSO: How can over 60s get German citizenship under the new nationality law?

What counts as ‘income’ under German law?

It’s important to note that income doesn’t just have to mean the salary you get at your job: income from rental properties, side hustles and freelance gigs can also be included, as well as things like alimony payments after divorce.

Once again, if you’re unsure, just ask. The citizenship offices are there to advise you and should give you clear instructions about what kind of documents count as proof of income in your application.

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