Soldiers of Panzergrenadierbataillon 371 show their equipment, which is in front of a Marder infantry fighting vehicle. The traffic light must now set clear priorities for budget spending.
(Photo: dpa)
There has rarely been such an exchange of letters in federal politics. The Green Vice-Chancellor Robert Habeck and the Liberal Vice-Chancellor Christian Lindner have written to each other about their political failures. Habeck thinks Lindner is doing Schäuble and is being sucked into a debt brake fetish. Lindner thinks that Habeck is not sticking to agreements and wants to break the Basic Law by demanding higher spending.
The dispute shows that the turning point is now also reaching the federal budget. The golden decade of distribution policy is over, and a new era of thrift is beginning. This is the maximum stress test for the traffic light.
For almost a decade there was always more tax revenue and therefore more and more to distribute. Then came Corona and the Ukraine war, and spending was financed through debt.
Money was already the cement for the grand coalition and it has been for the traffic light up to now. This is shown by the oversized wish list that the coalition partners brought to the budget negotiations. But the traffic light concluded its coalition agreement on outdated assumptions.
Three structural breaks weigh on the budget
In the past decade, politicians have reaped a triple dividend: a peace dividend because there was no military threat, a demographic dividend because the baby boomers were still in the workforce, and an interest dividend because debt didn’t cost anything for years. Now, all three dividends aren’t just evaporating at the same time — they’re reversing into new burdens.
The traffic light can now prove whether it meets the demands of a progressive coalition. Instead of distributing more and more money, she has to set priorities. This is exhausting and painful, but absolutely necessary. The coalition must increase the defense budget significantly – and do without other things.
The turn of the century arrives in the budget, some politicians just don’t want to admit it.
More: Budget scandal – Habeck and Lindner argue about the federal budget