German Chancellor Olaf Scholz announces 2024 budget plan after weeks of debt crisis talks

Germany’s government has reached a deal on its 2024 budget and will keep current debt restrictions into next year following weeks of tense negotiations, leadership coalition partners announced Wednesday.

The government is expected to save 17 billion euros ($18.33 billion) in its core budget by ending climate-damaging subsidies and cost cutting, Chancellor Olaf Scholz said in a press conference on Wednesday.

“Prioritizing means figuring out what we can afford and what we can’t, together. It is also about cuts and savings. We don’t like doing those, of course, but they are necessary,” Scholz said.

Germany will also cut spending from its climate and transformation fund, which was at the core of negotiations.

Scholz added that the government was sticking to its goals, including supporting Ukraine, pushing ahead with Germany’s green transformation and strengthening social cohesion.

“These three goals lead us in an unchanged manner. But it is clear that we need to manage reaching them with significantly less money,” Scholz said, adding that the government will also preserve its debt brake, first enacted in 2009.

The brake caps the amount of government debt and limits the country’s structural budget deficit. It can only be suspended in emergency situations, such as the Covid-19 pandemic.

Budgetary tensions erupted in November after Germany’s constitutional court ruled that the government’s plans to re-allocate unused emergency debt taken on during the Covid-19 pandemic to its current budget was unlawful.

On Wednesday, Scholz said that the ruling would not only impact the current and upcoming budget, but also how further budgets will be…