German parliament okays €476.29 bn budget for 2023, predicts recession

Admin l Friday, November 25, 2022

 

BERLIN – The German parliament passed the 2023 budget in Berlin on Friday, taking out new debt to the tune of €45 billion ($47 billion) to fund state aid in times of crisis.

“We will surmount the crisis, but we will not neglect the challenges of the future for this country,” Finance Minister Christian Lindner of the pro-business FDP told the Bundestag.

The total budget comes to €476.29 billion, with factors like the war in Ukraine and high energy and food prices impacting expenditure.

The so-called “debt brake” constitutional rule limiting new borrowing was deactivated to deal with crises caused by the pandemic and energy bottlenecks. Nevertheless, fresh borrowing is permitted under the rule amid expectations of a recession.

Lindner highlighted record investments, while the conservative opposition expressed criticism of the fact that defence expenditure would not grow towards the 2% of gross domestic product pledged by Chancellor Olaf Scholz of the Social Democrats (SPD).

The smaller opposition parties, Die Linke on the hard left and the Alternative for Germany (AfD) on the far right, criticized the budget as setting the wrong priorities.

Among the major expenditures are housing reforms, subsidies to low-income households to offset heating costs and tax cuts. Child allowances are to rise, and a new basic income at a higher level is to replace benefits paid to the long-term unemployed.