Germany presents details of agreement on 2024 budget with 8 billion euros for Ukraine

Germany's governing coalition presented the details of the agreement on the country's approved budget for 2024 after a month of intense negotiations, which, in particular, provides for the continuation of support for Ukraine.

Source: European Pravda, citing Olaf Scholz, Chancellor of Germany, Robert Habeck, Germany’s Federal Minister for Economic Affairs, and Christian Lindner, Federal Minister of Germany for Finance, as reported by DW

Lindner said Berlin planned to provide direct bilateral aid to Kyiv of EUR 8 billion next year.

"We will continue to bear this responsibility," the Minister of Finance promised.

Scholz said the government would adhere to the so-called "debt brake", which limits Germany's public deficit to 0.35% of gross domestic product (GDP), in the 2024 budget.

However, the government reserves the right to later suspend the debt rules, if necessary, in the event of a worsening military or financial situation in Ukraine, the Chancellor noted.

Scholz also emphasised that the Climate and Transformation Fund will remain a key tool for the climate transformation of the German economy, but it will be cut by EUR 12 billion by 2024.

At the same time, Habeck said that the government coalition agreed to end financial incentives for purchasing electric cars earlier than planned, without revealing when they will end.

He also announced that subsidies for expanding solar energy will be reduced.

Lindner says the government will cut EUR 3 billion worth of climate-damaging subsidies. In addition, changes have been made to how the renewal of the country's rail network will be funded.

Background:

• Earlier, it was reported that Germany's governing coalition agreed on the country's budget for 2024 after a month of tense negotiations amid a crisis related to the emergence of a "hole" in the budget of EUR 60 billion.
• Germany's budget situation has descended into chaos following a November ruling by the Constitutional Court, which ruled that Berlin cannot redirect EUR 60 billion of unused funds from the COVID pandemic to climate projects.
• On 9 December, Scholz told the Social Democratic Party of Germany party conference that he was confident of reaching an agreement, but said there would be no cuts to the social security system that Lindner wants to reform.
• Earlier, the German government agreed on an additional budget for 2023, suspending for the fourth year in a row the so-called "debt brake", which limits the structural deficit of the budget.

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