(Bloomberg) -- Chancellor Olaf Scholz and his partners in Germany’s ruling coalition are continuing “very intensive” negotiations Wednesday as they try to seal an agreement on a revised 2024 budget, according to a government spokesman.
Scholz and senior coalition officials have been forced to overhaul their finances due to last month’s judgment by Germany’s top court that restricted the use of special funds outside the regular federal budget. Finance Minister Christian Lindner identified a gap of €17 billion ($18.3 billion) for next year that needs to be plugged with measures like spending cuts and reductions in subsidies.
They’re under pressure to get an agreement so that the new budget can be signed off in cabinet and sent to both houses of parliament for approval by the end of the year. Otherwise, they may have to draw up a provisional plan to tide them over into the early months of 2024.
Scholz and senior coalition officials gathered Tuesday evening at the chancellery before breaking off the talks overnight and reconvening Wednesday morning. Scholz’s chief spokesman, Steffen Hebestreit, said that while he expects to be able to announce an agreement “very soon,” he can’t specify which day that might happen. In any case, he said he’s certain that the cabinet will approve the revised 2024 finance plan before the end of the year.
“Whether it can then be pushed through all the relevant bodies in the Bundestag and Bundesrat depends on how quickly we’re done,” Hebestreit added.
Read More: German Budget Turmoil Handcuffs Lindner on EU Fiscal Rules Deal
The shock ruling by the Constitutional Court has unsettled investors and prompted a call from Bundesbank President Joachim Nagel for clarity.
Unresolved financing issues and government infighting on spending priorities “is always bad for financial markets,” Nagel, a member of the European Central Bank’s governing council, warned last month.
--With assistance from Arne Delfs.
(Updates with Scholz spokesman starting in first paragraph)
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