German chancellor defends household budget cuts

By Oliver Towfigh Nia

BERLIN (AA) - German Chancellor Olaf Scholz on Wednesday defended budget cuts for fiscal year 2024, citing the coronavirus pandemic and an energy crisis caused by Russia's war in Ukraine as the main reasons.

The budget was obviously challenged by the fact that many had "gotten used to the large dimensions" associated with combating the COVID-19 pandemic and mitigating the effects of the Ukraine war, Scholz said during a question-and-answer session in the Bundestag, or German federal parliament.

"But it is now also clear that we will now set up budgets again that do not try to fight crises with these additional credit-financed funds," he added.

Scholz named defense, the transition to climate neutrality, and social cohesion as budget priorities for next year.

Earlier in the day, the German Cabinet approved the draft budget for 2024 and the financial planning for the following years. Significant savings are planned, from which only the Ministry of Defense is excluded.

The government plans to spend €445.7 billion ($485 billion) next year, which is significantly less than the €481.3 billion budgeted for 2022 and the current year's €476.3 billion. New borrowing will be limited to €16.6 billion next year, and the debt break will be complied with again.

The cuts have a disproportionate impact on the social sector. The subsidy for long-term care insurance, for example, would be completely eliminated.​​​​​​​