German parliament approves 2023 budget ahead of expected recession

Natalie Portman
By Natalie Portman 2 Min Read
origin 1An overview of the debate on the federal budget 2023 on budget week in the German Parliament (Bundestag). Bernd von Jutrczenka/dpa

Germany’s parliament on Friday approved its 2023 budget in Berlin, taking on new debt amounting to 45 billion euros ($47 billion) to finance state aid in times of crisis.

“We will overcome 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 amounts to €476.29 billion, with factors such as the war in Ukraine and high energy and food prices impacting spending.

The constitutional rule of the so-called “debt brake” that limited new loans has been deactivated to address the crises caused by the pandemic and energy bottlenecks.

However, the rule allows for new lending in anticipation of a recession.

Lindner highlighted record investment, while the Conservative opposition voiced criticism that defense spending will not grow towards the 2% of gross domestic product promised by Social Democrats (SPD) Chancellor Olaf Scholz.

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

Among the major expenditures are housing reforms, subsidies for low-income families to offset heating costs and tax breaks.

Family allowances will increase and a new basic income at a higher level will replace the benefits paid to the long-term unemployed.

origin 1Karl Lauterbach (L), German Health Minister, talks to Lisa Paus, German Minister for Family Affairs, during the debate on the 2023 federal budget on Budget Week in the German Parliament (Bundestag). Bernd von Jutrczenka/dpa
origin 1Robert Habeck, German Vice Chancellor and Minister for Economic Affairs and Climate Protection, speaks during the 2023 federal budget debate on Budget Week in the German Parliament (Bundestag). Bernd von Jutrczenka/dpa

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