Schnitzer warns: No new debts for the catering industry!

Schnitzer warns: No new debts for the catering industry!

The discussion about the financial policy of the black-red federal government is becoming more intense. Monika Schnitzer, chairwoman of the Economic Advisory Council, was critical of the planned VAT reduction in the catering industry. In an interview, she made it clear that this measure was not the right answer to the current economic challenges and that limiting spending was instead necessary. Their main focus is on the existing budget gap, which they believe is forcing action.

Schnitzer recommends that instead of taking on new debt, expenses should be reduced. In particular, she mentioned unclear sources of financing for certain expenses and called for a waiver of increases in maternal pensions and agricultural diesel subsidies. These proposals reflect the urgent need to stabilize the state's financial situation without incurring further debt. It strongly warns against taking on new debt for non-investment spending, which could jeopardize long-term stability.

Government budget plans

In a further step, the federal government plans to present the budget for 2024. Chancellor Olaf Scholz, Vice Chancellor Robert Habeck and Finance Minister Christian Lindner have announced that they want to achieve savings totaling 17 billion euros. These measures should be implemented without suspending the debt brake. However, the possible suspension of financial aid to flood victims in the Ahr Valley is being examined.

Particularly noteworthy is the reduction of 12.7 billion euros in the Climate and Transformation Fund (KTF). This drastic reduction is part of a broader plan to reduce planned spending by a total of 45 billion euros by 2027. The KTF remains a central instrument for the climate-neutral transformation with a total volume of 160 billion euros.

Consequences and challenges

The intended savings also concern aid to Ukraine, for which a total of 14 billion euros will be made available, and should not be influenced by the austerity measures. The government is also planning to cancel a subsidy of 5.5 billion euros for the electricity network, which could lead to higher electricity prices. In order to increase the KTF's revenue, an increase in the CO2 price is being considered, while at the same time climate-damaging subsidies are to be reduced.

The Bundestag's Budget Committee could complete discussions on these issues before Christmas, with the final decision scheduled for January 2026. Until the new budgets come into force, an interim budget will be implemented that will allow the Treasury to release a percentage of funds each month.

The political and economic decisions that must now be made are groundbreaking for Germany's future financial policy. It remains to be seen how the government will overcome the challenges posed by Schnitzer's proposals and its own budget plans.