Allocating Funds for a Trimonthly Spending Plan in 2025 (Federal Budget 2025)
The Bundestag is set to decide on the 2025 federal budget, totalling 502.5 billion euros, this Thursday. However, the budget has been met with criticism from the opposition parties, including the Green Party, AfD, and The Left, who accuse the coalition government of disguising true new debt through a complex mix of core budget and special funds.
The traffic light government, comprising the Social Democrats (SPD), the Greens, and the Free Democrats (FDP), has faced criticism for their handling of the budget. Green politician and chairwoman of the budget committee, Lisa Paus, accused the government of squandering funds intended for investments on consumer spending. The opposition parties argue that the use of special funds for defense and infrastructure investments obscures the actual fiscal situation and permits higher borrowing beyond constitutional debt limits.
The dispute over the use of investment funds centres on the government's budget structuring via special funds, which increases borrowing, especially for defense and infrastructure. This has raised concerns about transparency and the real impetus for growth or social benefit.
The opposition parties have particularly criticised the large special funds for defense and infrastructure investments, which they claim obscure the actual fiscal situation and permit higher borrowing beyond constitutional debt limits. For instance, the federal government plans to use more than 37 billion euros from the infrastructure special fund this year.
The deficit in the core budget is expected to be almost 82 billion euros. In response, MP for household policy, Schwerdtner, criticised the budget, stating that "Never before has a government spent so much money, and never before has so little reached the people."
The Green parliamentary group leader, Britta Haßelmann, spoke of "shifting trains and budget tricks" and insisted that funds from the special fund should be used for climate protection investments. Schwerdtner, the chairwoman of the Left party, also criticised the social imbalance of the budget and declared that her party will not support it.
The Union's deputy parliamentary group leader, Mathias Middelberg, highlighted the investment share of over 20 percent or 62.7 billion euros in the budget, which he believes will create the basis for new economic growth in Germany. He sees potential for savings in the social system and mentioned a commission to reform it.
The Union and SPD have been accused of giving "almost 50 billion euros in tax gifts to companies," according to Schwerdtner. Klingbeil, however, emphasised investments in infrastructure and digitization to make the country more effective and modern.
The budget also includes provisions for the military area, including support for Ukraine, with 75 billion euros provided in the core budget, with 30 billion being debt-financed. Additionally, 1.5 billion euros from the special fund will go to hospitals, and almost three billion euros to the expansion of broadband for better internet connections.
A provisional budget management is currently in effect due to the delay in adopting the 2025 budget, and the procedure for the 2026 budget is already underway. The Bundestag will debate the 2026 budget plan for the first time next week, and it is expected to be decided this year. Schwerdtner proposed a wealth tax that could bring in "100 billion euros" annually as a potential solution to the budgetary issues.
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