Commentary on the 2025 Budget Draft: A Balancing Act or a Tightrope Walk?
Well, well, well! Here we are deep in the belly of the budget beast, holding a draft for 2025 that’s caused quite the ruckus. Finance Minister Silke Schneider has taken the stage in the Schleswig-Holstein state parliament, and what do we get? A budget draft that some are calling a “show of strength,” while others think we’ve all just boarded the express train to the land of poor decisions!
A New Era of Debt?
Now, let’s break this down, shall we? Schneider wants to justify the new debts of around €414 million, saying it’s all because of a lack of economic recovery. I mean, if you can’t recover economically, why not throw some loans onto the pile, right? It’s like deciding to balance your diet with a side of chocolate cake. ‘I’ve had a rough day; I deserve this!’ The irony—or shall we say tragedy?—is rich.
With new loans that include €298 million in regular debt and an emergency loan of €116 million, the government’s focus seems to be on childcare, education, social housing, and, of course, climate investments. That’s right, folks! We’re putting our money where our mouth is for the future. But is this a robust plan or just covering urgent needs with an ever-expanding credit card bill? Time will tell!
Saving is the New Spending?
Let’s look at that *savings package* Schneider mentioned. It seems counterintuitive to pat yourself on the back while announcing that you’re chopping down on costs like it’s a Black Friday sale. Certain cuts include spending on accommodations for refugees and a rather curious decision to cut subsidies for something as critical as the university hospital. “Because who needs health when you can save a few bucks?” said no one ever!
Highlights of the Savings Package:
- €77.9 million: Accommodation for refugees
- €20.3 million: Urban development funding
- €10 million: Reduction in cost subsidy to UKSH
- €6.2 million: Aid cost reduction for civil servants
- €2.6 million: Expiry of the pension security fund
- €30 million: Digitalization budget trimmed from reserves
Political Drama Unfolds
Now, let’s try to add a sprinkle of joy to this budgetary chaos. The opposition parties have taken aim at those austerity measures like they’re piñatas at a party. SPD leader Serpil Midyatli is calling it a “*budgetary wrong path*,” which sounds catchy—like a song by a disgruntled pop artist. She argues that during a crisis, we should invest, invest, invest! It’s a classic showdown: the penny-pinchers versus the spend-thrifts. And honestly, who doesn’t love a good fiscal smackdown?
Meanwhile, the CDU is reportedly feeling pleased with itself for maintaining a robust stance. Because nothing screams “excellent job” quite like navigating choppy financial waters without a life vest.
Calls for Change
Christopher Vogt from the FDP feels we’re navigating heavy seas. And if I’m reading between the lines correctly, it seems he’s worried that a budget this tight could lead to deindustrialization—basically, a fancy term for saying we might become the “ghost town of Europe.” They’re calling for economically bold moves. Because what we really need right now are promises of a bright, shiny *Agenda 2030*! And what does that look like? A load of plans that may or may not materialize into actual results, as we hold our breath waiting!
In Search of Wealth
Now, here’s a cheeky proposal: the SSW leader Lars Harms is waving the flag for a wealth tax. Are we going to tax the rich to plug the holes in our budget? What a novel idea! Because surely, when faced with financial woes, turning to the wealthy is as effective as asking a fox to guard your henhouse. But hey, at least it’s a conversation starter!
Final Thoughts
As we all await the final judgment on the 2025 budget in January, one thing is clear: Schleswig-Holstein has quite the balancing act on its hands. Will it turn out to be a masterclass in fiscal responsibility, or a lead balloon weighing us down into the abyss of debts? Either way, one thing’s for sure: we’ll need more than just band-aids on wounds for this appeal. Buckle up, Schleswig-Holstein; the financial rollercoaster is just getting started!
As of: October 16, 2024 8:51 p.m
A savings package, new debts and an emergency loan: the 2025 budget draft is controversial, as the debate in the state parliament has shown. Some see it as a “show of strength”, others see the country on the wrong track.
Finance Minister Silke Schneider (Greens) spoke in the state parliament of a show of strength. She justified the new debt with increasing expenses: the lack of economic recovery affected tax revenue. At the same time, there are high mandatory additional expenses imposed by the federal government. Their solution: A “triad of consolidating, reducing bureaucracy and investing,” said Schneider in the state parliament. According to the Schleswig-Holstein Finance Minister, the budget situation is not easy.
New loans of 414 million euros planned
Despite the savings plans, Schleswig-Holstein will not be able to do without new loans in the coming year. Schneider’s draft budget provides for debts of around 298 million euros and an emergency loan of 116 million euros. According to the state government, the focus of the financial budget next year will be on daycare, schools, social housing and investments in a climate-neutral future. Another emergency loan is intended to cushion the consequences of the Ukrainian war and be used for additional expenses caused by the Russian war of aggression in Ukraine.
“Consolidating without anyone in the country noticing doesn’t work.” Finance Minister Silke Schneider (Greens)
A large part of the costs that were financed through emergency loans this year will be borne from the regular budget starting next year. To make this possible, the state government has launched a savings package for the coming year.
- 77.9 million euros: Accommodation of refugees in state accommodation
- 20.3 million euros: urban development funding
- 10 million euros: reduction of the extreme cost subsidy to the UKSH
- 6.2 million euros: cost reduction in aid for civil servants
- 2.6 million euros: Expiry of the pension security fund
- 30 million euros: Used from the reserve for IT and digitalization to finance the digitalization budget
Source: Ministry of Finance CDU parliamentary group leader Koch: “The state government has done an excellent job.”
The CDU parliamentary group leader Tobias Koch considered the situation to be “serious, but not hopeless.” He referred to the investments in the areas of security and education, including an additional 61 million euros for daycare centers.
SPD: “Lack of investment in the future is a prosperity killer”
SPD parliamentary group leader Midyatli: “The Günther government’s course is a wrong path.”
The opposition criticized sharply. From the point of view of opposition leader Serpil Midyatli (SPD), the government’s course is a “budgetary wrong path”. “The CDU and the Greens have decided to impose tough austerity measures on the state of Schleswig-Holstein. They are responding to a crisis with austerity measures. The most recent crises also show that it is important to invest right now. That would be one “It was the answer to this crisis and not further uncertainty through austerity measures,” said Midyatli. Nevertheless, from Midyatli’s point of view, the day is good news for democracy. “Because today it shows once again: There are differences between the democratic parties in this country. It makes a difference who citizens vote for.”
“The course of the Günther government is a wrong path for our country.” SPD parliamentary group leader Serpil Midyatli
FDP: “Less bureaucratic burden, better education”
Christopher Vogt, chairman of the FDP state parliamentary group, sees the black-green state government increasingly navigating heavy seas.
The FDP was concerned about the country’s competitiveness and saw prosperity at risk. There is a threat of deindustrialization, warned the parliamentary group leader Christopher Vogt. He called for an economic turnaround and a kind of “Agenda 2030” from the federal and state governments. The problems are homemade. The CDU and the Greens reacted too late and now have to clear away the rubble of their own politics. The cuts to the draft budget are urgently needed, but the state is not investing enough, said Vogt. Vogt considers the renewed emergency loan to be unconstitutional because the expenditure has no connection to Ukraine. More budgetary discipline and concentration on core state tasks such as security, infrastructure and education are needed.
SSW advocates wealth tax
SSW parliamentary group leader Lars Harms is backing a wealth tax.
The South Schleswig Voters’ Association (SSW), on the other hand, supported the planned taking out of the emergency loan. Parliamentary group leader Lars Harms spoke out in favor of reforming the debt brake and advocated a wealth tax. In this way, more money should be flushed into the state government’s coffers. The state parliament wants to finally pass the 2025 budget in January 2025.
More information
Many cities, districts and communities are worried. They don’t know how to set up their budgets properly. more
On August 1st, Silke Schneider will take over the head position in the Ministry of Finance. She succeeds the outgoing Monika Heinold. more
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News for Schleswig-Holstein | Oct 16, 2024 | 12:00 p.m