By Christian Kraemer and Maria Martinez
BERLIN (Reuters) - German Chancellor Olaf Scholz's three-party coalition on Tuesday spelled out how it would save 17 billion euros ($18.66 billion)in its 2024 budget after a court ruling threw the government's finances into disarray last month.
Although the coalition announced an agreement on the key points of the draft budget for 2024 last Wednesday following weeks of negotiations, there were many questions open on where the announced savings would be made.
These are some of the key measures.
SPECIAL FUNDS
Germany currently has 29 off-budget funds at the federal level, with a total of 869 billion euros, according to the independent auditing institution Bundesrechnungshof. To fill the 17 billion euros gap, 3.2 billion euros will come from special funds that are not in conflict with the court ruling.
RECALCULATIONS
There will be 2.7 billion euros less in expected interest expenditures, due to recalculations and the suspension of certain programs of the economic stabilisation fund (ESF). The ESF was created in 2020 with the aim of supporting companies through the coronavirus pandemic, but since last year it has focused on the energy crisis.
CUTS IN CERTAIN MINISTRIES
There will be 1.4 billion euros saved in total in several ministries. Expenditure on Germany's international commitments will be reduced by a total of 800 million euros, the budget of the federal ministry for digital and transport will be cut by 380 million, and the budget for the ministry of education and research cut by 200 million euros. The government subsidy to the statutory pension insurance scheme will be reduced by 600 million euros.
FEDERAL EMPLOYMENT AGENCY
The Federal Employment Agency is paying partial compensation for the annual subsidies from the federal budget received during the coronavirus crisis. This reimbursement amounts to 1.5 billion euros.
PLASTIC LEVY
The government expects 1.4 billion euros in savings as companies will have to pay a plastic levy themselves that the government used to pay for them.
AHR VALLEY FLOODS
A special fund for the floods in the Ahr Valley was created in 2021 and there are 2.7 billion euros earmarked for 2024. The amount will either be raised via emergency loans or covered from the budget after a still pending review.
($1 = 0.9111 euros)