Germany to implement provisional budget in 2025 amid elections

Germany’s finance ministry has announced the adoption of a provisional budget for the onset of 2025. This decision was taken in the wake of the dissolution of Chancellor Olaf Scholz’s three-party coalition. The country is gearing up for elections scheduled for February 23, which led to the need for an interim financial plan.

Finance Minister Joerg Kukies and his budget department have communicated with all ministries and government bodies, detailing that the interim government will manage the country’s finances based on the 2025 draft budget until a new administration formulates its own fiscal strategy.

The temporary budget will restrict spending to obligations that are legally mandated and essential for the nation’s operations. This includes disbursing funds for unemployment and child benefits, student grants, and ongoing or planned construction projects. In case of emergencies, parliament retains the authority to sanction additional expenditures.

The requirement for a provisional budget arose after the coalition parties failed to reach a consensus on the 2025 budget in November. Subsequently, Chancellor Scholz relieved Christian Lindner, a member of the Free Democrats, from his role as finance minister. On Monday, lawmakers are expected to endorse a motion to dissolve parliament, which will facilitate the early elections.

The interim budget is set to stay in effect throughout the coalition discussions and until the incoming government establishes its budget for the year 2025. Finance ministry officials anticipate that the new government will likely finalize its budget in the latter half of the next year.

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