The never-ending budget talks
After the coalition somehow managed to piece together a sort-of budget agreement for 2025 at the beginning of summer, many thought (and hoped) the worst of negotiations were behind us.
But no, this is Germany. And that means that nothing is ever quite that simple, especially when it comes to spending and saving.
Cracks have emerged in the financing behind the plans, which include funding greater security and societal cohesion, tax relief for residents and businesses, family support, ambitious climate action and accelerated economic growth.
READ ALSO: Kindergeld and tax relief – How Germany’s planned budget could affect you
After last year’s catastrophic constitutional court ruling that threw Germany’s spending plans into disarray resulting in a €60 billion shortfall, the government is keen to avoid any other potential budget disasters.
But things are still shaky.
The coalition, dubbed the ‘traffic light’ thanks to the party colours of the Social Democrats (SPD), Greens and Free Democrats (FDP), plans to spend almost €490 billion next year. More than a tenth of that amount – €51.3 billion – will be on credit. They also plan a record investment of €81 billion.
This is all set to happen even though the infamous debt-brake (Schuldenbremse) – a self-imposed cap on annual borrowing at 0.35 percent of the GDP – is back in force. However, the coalition says the proposals comply with the debt brake, which allows new debt to a limited extent in the event of a struggling economy.
READ ALSO: How deep does the German fear of debt go?
Nevertheless, there are doubts as to whether the draft budget is constitutional. The opposition Christian Democrats (CDU), which won the challenge at the constitutional court on spending last year, is talking about the possibility of fresh legal action.
Finance Minister Christian Lindner (FPD) appeared in the Bundestag this week to defend his plans – and admitted that things were not rosy.
There is still a financial gap of €12 billion, which the government had not been able to reduce as much as it had planned “despite all our efforts”, admitted Lindner.
Why should all of this matter to residents? Because there will likely be more cuts in the pipeline that will affect services and leave people with less money in their pocket.
Expect a rocky few weeks and months ahead.
Who should be allowed to enter Germany?
It’s been a rough summer for the government. As well as the budget difficulties, another topic at the top of the news agenda is migration policy.
The government has already been facing mounting pressure to limit the number of migrants arriving in Germany and crack down on extremists after a number of suspected Islamist attacks in recent months.
Things reached boiling point in August when three people were killed in a knife attack in the western city of Solingen, in which the Syrian suspect was meant to have been deported but escaped law enforcement.
READ ALSO: ‘Ban asylum seekers’ – How Germany is reacting to Solingen attack
As well as tightening the law around carrying knives, Germany also drew up tougher rules for illegal migrants, such as refusing benefits payments.
The government has also vowed to step up deportations of asylum seekers convicted of crimes. Germany returned 28 Afghans late last month for the first time since the Taliban returned to power in August 2021.
This week the German government also said temporary controls will be extended to the internal borders with all nine of its EU neighbours for six months – a move that has seen pushback from the EU and Poland.
READ ALSO: How Germany’s increased border checks will affect travel from other countries
Despite this, the government is still facing strong criticism from opposition parties, who have been calling for more action to curb irregular migration. This refers to people trying to enter Germany without going through the usual channels like with a visa.
In an unusual move, Christian Democrat (CDU) leader Christian Merz last month offered to work with Chancellor Olaf Scholz away from his government partners. Merz put forward his own agenda, which included proposing a “national emergency” that could potentially override EU law, and ensure that migrants who have first travelled to another EU country are turned back at the German borders.
READ ALSO: How an explosive row over immigration has divided Germany
A cross-party migration summit started this week, but Merz maintained that “it will only work if we really push back on a large scale”.
During the general debate in the Bundestag on Wednesday, the CSU’s Alexander Dobrint was keen to stress the failures of the SPD-led coalition when it comes to migration issues – but he did fail to mention that significantly more migrants arrived in Germany under Angela Merkel’s CDU/CSU-led government.
Scholz barked back at the conservatives during the debate, accusing them of “talking in slogans” but “not getting anything done”.
The chancellor also defended his government’s migration policy and emphasised the need for immigration to Germany. ‘”There is no country in the world with a shrinking labour force that has economic growth,” he said.
“That is the truth that we are confronted with,” he added, while also emphasising the need for management and control.
With migration at the top of German voters’ minds, this issue will continue to plague the government.
How will the government handle AfD gains at state elections?
That brings us to the rise of the far-right. Alternative for Germany (AfD) won the most votes in a recent state election in Thuringia, and came a close second (behind the CDU) in Saxony.
Meanwhile, the left-wing populist Sahra Wagenknecht Alliance (BSW), a new party to the state ballots, had the third biggest share of votes in both states.
READ ALSO: ‘Political earthquake’ – What the far-right AfD state election win means for Germany
With state elections coming up in Brandenburg on September 22nd – and with the AfD riding high in the polls there – the outlook is bleak for mainstream parties, who have all vowed not to work with the AfD in government and are grappling with how to deal with the BSW, given its populist and often pro-Russian policies.
For the coalition, things are even worse. Much like in the European elections back in June, the governing parties performed terribly, with the FDP and Greens even missing the five percent threshold to make it into parliament.
Voters are making their intentions clear: they are angry at the current situation. The question is: will these elections be a wake up call for the government parties ahead of the nationwide election in 2025?
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