“Hthere is an agreement”, government sources told Agence France Presse (AFP), announcing a press conference for today.
The details of this agreement are not known because the Government is still trying, before the end of the year, to see how to fill the budget hole of 17 billion euros next year.
Germany’s Constitutional Court triggered a budget earthquake and political crisis last month by censoring the use of special funds, forcing the government of Social Democrat Olaf Scholz to review its 2023 and 2024 budgets.
The high court canceled the transfer of 60 billion euros of unused pandemic credits to an envelope dedicated to green investments and industry support, considering that Olaf Scholz’s government violated the country’s strict budgetary rules by carrying out this reallocation of expenses. .
This decision caused discord between the three parties of the coalition, the left-wing parties (social democrats and environmentalists), in favor of increasing public spending, and the Liberal Party (FDP), in favor of austerity.
Liberal Finance Minister Christian Lindner advocated a reduction in social spending, while Social Democrats and environmentalists, including Economy Minister Robert Habeck, opted for a reform of the constitutional debt containment rule.
Enshrined in the German Basic Law since 2009, this rule prohibits the Government from borrowing more than 0.35% of its GDP every year in order to limit the debt burden.
This crisis in Europe’s largest economy, already faced with a challenge to its industrial model, is causing concern in the economic world, but also among Germany’s European partners and takes place in the midst of negotiations on the reform of budgetary rules within the EU.
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