(Bloomberg) -- Germany’s government still has to secure as much as €9 billion ($9.8 billion) for next year’s budget as it awaits the outcome of a review of some proposed measures, according to Finance Minister Christian Lindner.
“It’s true that we still have a challenge in the order of €8 billion to €9 billion; the chancellery has also made public proposals on how this can be achieved,” Lindner said Sunday in an interview with “Bericht aus Berlin”— ARD-Hauptstadtstudio.
“I have initiated an independent audit, the results of which will be carefully evaluated,” he added.
Earlier this month, Germany’s ruling coalition approved a draft budget for 2025, but some of its plans have been questioned. The proposal to provide state-owned companies Deutsche Bahn AG and Autobahn GmbH with money in the form of loans, which would not fall under the so-called debt brake, has been doubted by the constitutional lawyer Hanno Kube, according to a report in Tagesspiegel.
Lindner told ARD that the proposals must be examined in terms of constitutional law, but also in terms of whether they make economic sense.
One must evaluate “very carefully” whether replacing a state subsidy with a loan — for which interest must be paid — is sustainable in the long term, he said. Additional debt for Deutsche Bahn could worsen the national railroad’s creditworthiness.
If the outcome of the audit were to be negative, the ruling coalition would have to discuss alternatives by the end of November, Lindner said. However, declaring an emergency because of the war in Ukraine — and thus sidestepping the debt brake — is a non-starter, he said.
“We have no emergency situation,” Lindner said in the interview. “Russia’s attack on Ukraine is establishing a new, permanent reality.”
Lindner added that Defense Minister Boris Pistorius will get no additional money beyond the €100 billion special fund earmarked for modernizing the armed forces in Europe’s largest economy.
©2024 Bloomberg L.P.
