Conflict in Ukraine, energy shock, climate targets, budget gap: is Germany’s traffic light government nearing its end?

The former model boy Germany stumbles. Not only because new crises continually hinder progress, but also because the alliance partners have to unite again and again.

Additional budget before Christmas

Whether it concerns the Ukraine conflict, the energy shock, the climate goals, the economic transformation, social policy or the migration issue: political fists fly with every challenge. Even when it comes to the latest crisis, the billion-dollar budget gap, the positions of the coalition partners differ widely.

But no one wants to give up. The supplementary budget for 2023, hastily approved by the cabinet, must be adopted by parliament before Christmas. If possible, the budget for 2024 should also be finalized this year. However, there is no agreement yet on what exactly this means.

And so Chancellor Olaf Scholz (65) of the SPD, his Deputy Minister of Green Economy Robert Habeck (54) and FDP Finance Minister Christian Lindner (44) are panting through a new phase of their crisis marathon in the daily negotiations.

The Federal Constitutional Court has kicked off this phase. According to the ruling in mid-November, unclaimed Corona aid could not be reallocated to the climate fund. The result: the state is now missing out on 60 billion euros in four budget years. For 2024 alone, 17 billion euros must be raised.

The German climate minister is absent from the world climate conference

The situation is so serious that German Climate Minister Robert Habeck even canceled his participation in the 28th UN Climate Conference in Dubai at short notice. Instead, solutions are fought for in the backroom. One has been found for the supplementary budget: the emergency situation. The war in Ukraine, climate change and the energy crisis have not gone away.

The FDP wants to make cuts for the new budget, especially in the social sector, international aid and government financing programs. The country is clinging to the debt brakes and rejecting tax increases. The SPD and the Greens, on the other hand, remain dependent on subsidies and want to pump money into the economy and society. That would entail new debts, i.e. suspending the debt brake or requesting a new emergency for 2024.

A delicate undertaking. Because the traffic light owes the harsh judgment from Karlsruhe to the opposition. The CDU had filed a lawsuit for embezzling Corona funds. She has achieved her goal. The disastrous budget deficit is once again causing the traffic lights to falter. The Federal Audit Office is also warning of a new emergency, the Bild newspaper reports. According to the highest federal authority, the supplementary budget is “extremely constitutionally problematic”.

A new emergency could lead to a new lawsuit at the Constitutional Court. Friedrich Merz (68) threatened this in Berlin on Monday. The CDU leader goes one step further and calls for early elections. Ideally in June 2024, at the same time as the European elections. And with a new candidate for chancellor: Friedrich Merz.