Germany must tackle expenditure problem, says finance minister

BERLIN, March 12 (Reuters) – Germany Finance Minister Christian Lindner said on Sunday he wanted to tackle expenditure in the 2024 budget to fix the country’s structural deficit that had resulted from the COVID-19 pandemic and the energy crisis.

Lindner said he had informed Chancellor Olaf Scholz on Wednesday that he would not be able to present the cornerstones of the 2024 budget at the upcoming cabinet meeting this week as there was not sufficient agreement on it yet.

“We have a massive expenditure problem,” he told broadcaster ARD on Sunday. “We must consolidate,” he said, adding that higher debt and taxes were not valid options.

Lindner, of the pro-business Free Democrats, and Economy Minister Robert Habeck of the Greens last month clashed over plans for next year’s budget, according to an exchange of letters seen by Reuters.

Reflecting concerns among some Greens that there will be insufficient funds for some of their planned projects, especially as the government is committed to strict debt rules, Habeck took issue with Lindner’s proposals.

Habeck urged Lindner not to unilaterally prioritize spending in some areas, including on the armed forces and tax reductions for the gastronomy sector, saying his party could not accept the budget plans.

Lindner rebuffed Habeck in blunt language.

On Sunday, he said the coalition was not blocked but in a difficult situation.

His ministry recently said the draft budget should be ready by June despite the growing tensions. (Reporting by Christian Kraemer; Writing by Sarah Marsh, Editing by William Maclean)