The scholz poker: federal government approves 2020 budget

The scholz poker: federal government approves 2020 budget

The budget is in the black – but the finance minister had to calculate particularly carefully this year. There is no room for special wishes in his 2020 budget, and olaf scholz (SPD) is even planning to save money.

At the same time, however, he promises after the cabinet decision: "we can spend a lot of money."The federal government is planning to make record investments that will ensure social cohesion, a modern country and a prosperous economy. Scholz promises that there will be enough money for climate protection – even if the federal government has no plan as yet for exactly what it wants to spend it on.

Overall, the vice chancellor expects spending to rise slightly to 359.9 billion euros, despite weak growth in tax revenues. Following the deceptive tax estimate, the vice chancellor had to adjust his draft once again and can now spend 2.7 billion less than he initially wanted to. This is mainly due to the weakness of the global economy, which is particularly affecting germany as an export nation. All ministries had to jerk together once again.

The black zero, which has stood every year since 2014, is ultimately saved above all by the fact that germany has to pay enormously low interest rates on its debts. Scholz also digs almost ten billion euros into the reserve fund that the federal government set up for integration during the refugee crisis. In addition, there are global underspends of around 3.6 billion euros. These are savings commitments, but they are not backed up by concrete projects – it is simply calculated that there will be money left over at the end of the budget year anyway, because not everything can be invested as planned.

The most important priorities and benchmarks:

DEBT: germany continues to reduce its debt level. According to scholz, the maastricht criteria were met for the first time in 17 years. This is a european ceiling that allows a debt level of no more than 60 percent of gross domestic product.

Rough SINGLE BUDGET: that of labor minister hubertus heil (SPD). At 148.56 billion, it accounts for almost 41 percent of the federal budget. This is mainly due to more than 100 billion for the pension insurance – the largest expenditure of the federal government ever.

ENVIRONMENT: environment minister svenja schulze (SPD) has the largest increase of all ministries in her budget. It gets almost 15 percent more money, but with a total of 2.6 billion still none of the top budgets. The budget plan names as priorities the reduction of greenhouse gas emissions, insect protection and the search for a repository for radioactive waste. Rough climate protection targets still missing – the federal government does not want to set them until the end of the year. All necessary investments could be managed, promises scholz. The most important thing is that citizens with small and medium incomes are not overcharged.

SOCIAL ISSUES: the federal government wants to ease the burden on families with little money in particular. However, the biggest leaps will not come until 2021, when child benefit and the child allowance will be increased once again. In addition, the solidarity contribution for 90 percent of the payers is to be abolished. In 2020, increases in parental benefits, advance payments for child support and child allowances are initially planned. Money for better daycare centers should also be available.

TRANSPORTATION: transport investments rise to record level of 15.3 billion euros in 2020. The money is to go mainly to the railways. Previously, revenues from the car toll were also included, but these will no longer apply following the ruling by the european court of justice. The ministry of finance must therefore make further improvements. This will have an impact from 2021 onwards, when there will be a shortfall of 400 to 500 million euros. It is not yet clear how this will be balanced out, says scholz. Transport minister andreas scheuer (CSU) must propose.

EDUCATION AND RESEARCH: 100 billion euros have been earmarked for this over the next four years. In 2020, among other things, there will be one billion for all-day schools, and money has also been earmarked for increasing the bafog and digitalizing schools.

DEFENSE: minister ursula von der leyen (CDU) gets two billion euros more – for rough projects, but also more modern clothing and equipment for soldiers. By 2023, defense budget to shrink from 44.9 billion to 44.0 billion. This could lead to conflicts with the USA, because the nato quota is also falling. Germany has pledged to move defense spending toward two percent of gross domestic product by 2024. For 2023, only 1.24 percent is now targeted.

HOUSING: more funds earmarked for housing subsidies and social housing construction. Another 860 billion will also be earmarked for child construction subsidies.

NOT considered: the basic pension, which is still controversial in the federal government. However, says scholz, it will not burden the budget either. The SPD wants to use revenues from the european financial transaction tax, which has not yet been decided, and money from social security for this purpose.

CRITICISM: industry and trade complain about wrong priorities: in view of the weaker economy, even more must be invested instead of distributing unearned money for social projects. The social association vdk, on the other hand, warned that savings should not be made in areas such as basic pensions.

The FDP criticized that instead of investing in the future, scholz was once again focusing on increasing spending, for example, on money for pensions instead of for education. At the same time, his bill has a poorly concealed hole of 13 billion euros. "The principle of hope reigns supreme," said housekeeper otto fricke. His union colleague eckhardt rehberg (CDU) also spoke of a structural deficit of well over ten billion euros. "There is no more room for further spending without counter-financing."