Germany’s three-party ruling coalition has agreed on a new spending plan for next year after weeks of tense negotiations that have mired the government in political and fiscal crisis.
The deal, reached in the early hours of Wednesday, is set to be publicly announced in a statement to the press by Chancellor Olaf Scholz, his Economy Minister Robert Habeck and Finance Minister Christian Lindner at noon local time. Scholz is also scheduled to address parliament shortly thereafter.
“Habemus budget 2024!” wrote Andreas Schwarz, a budget policy lawmaker from Scholz’s Social Democratic Party, wrote on X (formerly Twitter). An official from the ruling coalition told POLITICO that a joint meeting of leading politicians from the three ruling parties — the SPD, Habeck’s Greens and the fiscally conservative Free Democratic Party (FDP) of Lindner — is scheduled for this afternoon.
Germany’s ruling coalition had been in disarray since a bombshell Constitutional Court ruling last month blew a €60 billion hole in its finances. The ruling created an immediate €17 billion financial gap for the 2024 budget.
Details on Wednesday’s budget deal are still unclear. The agreement is a draft proposal, which will still need to be discussed by members of ruling parties and approved in parliament. It’s expected to take effect in early January.
The draft agreement comes just before Scholz is set to fly to Brussels Wednesday afternoon for an EU-Western Balkans summit, as well as a crucial EU leaders’ summit on Thursday and Friday. There, the leaders will aim to agree on opening EU accession talks with Ukraine and on providing further defense funding for Kyiv. The leaders must also reach a budget deal on EU spending for the coming years.