Latest news with #Klingbeil
Euractiv
2 days ago
- Business
- Euractiv
Germany agonises over €200 billion budget hole
BERLIN – The German cabinet passed its 2026 budget draft on Wednesday, leaving it open, however, how the government will fill gaping holes in financial planning over the coming years. Germany's governing parties had loosened the country's strict debt rules earlier this year, allowing the coalition to borrow more for additional defence spending and investment in infrastructure. German Finance Minister Lars Klingbeil, a Social Democrat (SPD), praised the planned 'record investment' of €126.7 billion for 2026, including funding for infrastructure and the green transition of the economy. Defence spending will also rise by a third to €82.7 billion. Germany's constitutional borrowing limit, the 'debt brake', had long prevented investment in strengthening the country's neglected defence architecture and its ageing bridges and roads. Disagreements over how to square policy goals with fiscal constraints had, notably, pushed the previous coalition government to collapse. Germany's borrowing over the next few years has now been projected to balloon to some €850 billion, according to the 2025 budget draft and long-term planning presented by Klingbeil in June. It emerged, however, in recent days that this still leaves a budget hole around €30 billion larger than expected, amounting to shortfalls of €172 billion through 2029. The new figures arose partly because recent government decisions brought forward plans for pension subsidies as well as new compensation pledges for regional states and municipalities, which will lose revenue due to planned growth-enhancing measures. How Germany plans to spend €850 billion "I don't see any particular value in keeping the money and not spending it,' Germany's new finance minister said following the unveiling of his first budget. Klingbeil's popularity 'won't increase' It remains unclear how the gaps are to be closed, with additional growth unlikely to fill them. The government is currently aiming for more than 1 per cent of annual potential growth through 2029. Klingbeil said a mix of measures, including more cuts, would be necessary just to fill the 2027 shortfall, expected to amount to over €30 billion. 'This will be one of the biggest domestic challenges that we will have to overcome in the next 12 months,' he told reporters. 'Everyone at the cabinet table will have to make savings,' he said, adding that 'the popularity of the finance minister among the cabinet won't exactly increase'. Klingbeil also said Germany was planning to reform structures like the ballooning social security systems, for which it had established several expert commissions. Critics have long urged Germany to undertake deeper structural reforms to balance its books. "Instead of reforming the debt brake, we urgently need structural reforms to reduce the funding gap,' said Veronika Grimm, a fiscally conservative economist who advises the German economy ministry, led by the centre-right Christian Democrats. (aw)
Straits Times
2 days ago
- Business
- Straits Times
EU trade deal will take a toll on German economy, finance minister says
Sign up now: Get ST's newsletters delivered to your inbox German Finance Minister, Lars Klingbeil said he wished for a different outcome. BERLIN - German Finance Minister Lars Klingbeil is dissatisfied with the European Union's (EU) trade deal with the United States, as he thinks it will take a toll on Germany's economic growth, he said on July 30. 'I have no illusions about it, it is rather growth-weakening,' Mr Klingbeil said in the presentation of the 2026 draft budget, lamenting that the EU was 'too weak' in the negotiations. The US struck a framework trade agreement with the EU on July 27, imposing a 15 per cent import tariff on most EU goods. 'I would have wished for a different outcome,' Mr Klingbeil said. 'Still, all in all, it is good that there is an agreement with the US, that there are no further escalations.' REUTERS
Yahoo
3 days ago
- Business
- Yahoo
German finance minister warns coalition of looming austerity
German Finance Minister Lars Klingbeil has warned the coalition government of significant austerity measures ahead, citing major fiscal challenges in the years to come. "The 2027 budget will be an enormous challenge for the government," the Social Democratic politician said during a visit to the Lithuanian capital, Vilnius, on Tuesday. He stressed that meeting the budget goals would require every minister to make concessions. Klingbeil urged all ministries to begin identifying potential areas for savings. There is a gap of approximately €172 billion ($200 billion) in the federal budget for the years 2027 to 2029, government sources have said. Several budgets are under consideration in Berlin. Klingbeil is set to present his draft budget for 2026 to the Cabinet on Wednesday. He said that budget has been fully financed after intensive negotiations. Meanwhile, the 2025 budget remains under review and is expected to be adopted in September. Sign in to access your portfolio
TimesLIVE
18-07-2025
- Business
- TimesLIVE
Tariff war must end quickly, Germany's Klingbeil tells G7 partners
German finance minister Lars Klingbeil made clear in a meeting with his counterparts from the Group of Seven (G7) major economies on Friday that the global trade conflict must be ended quickly, he told reporters. 'But I also want to say very clearly: there will be no deal at any price, there should be no victory at any price,' Klingbeil said in Durban on the sidelines of the G20 finance chiefs meetings, where G7 ministers also met separately. Klingbeil called for a fair deal between the US and Europe on tariffs. The 30% tariff on imports from EU threatened by US President Donald Trump would, if implemented, be a game-changer for Europe and a heavy blow for Germany with its export-orientated economy.
Business Recorder
18-07-2025
- Business
- Business Recorder
Tariff war must end quickly, German finance minister tells G7 partners
DURBAN: German Finance Minister Lars Klingbeil made clear in a meeting with his counterparts from the Group of Seven major economies on Friday that the global trade conflict must be ended quickly, he told reporters. 'But I also want to say very clearly: There will be no deal at any price, there should be no victory at any price,' Klingbeil said in Durban, South Africa, on the sidelines of the G20 finance chiefs meetings, where G7 ministers also met separately. Klingbeil called for a fair deal between the U.S. and Europe on tariffs. The 30% tariff on imports from European Union threatened by U.S. President Donald Trump would, if implemented, be a game-changer for Europe and a heavy blow for Germany with its export-oriented economy. Bundesbank President Joachim Nagel also warned of the 'great global damage' that the uncertainty from tariffs is causing. 'My appeal to the U.S. side is not to play games with the situation, because in the end, the prosperity of us all is at stake here,' Nagel said at the press event with Klingbeil. EU chief delays retaliation for US tariffs in search of deal The head of Germany's Bundesbank had warned on Thursday in an interview with Reuters that the tariff plans risk wiping out even a modest recovery in Europe's largest economy in the coming years. U.S. Treasury Secretary Scott Bessent did not attend the two-day G20 meeting in person, his second absence from a G20 event in South Africa this year, though he did join the G7 meeting online on Friday morning, according to Klingbeil. 'We were once again very much in agreement that we want to overcome existing problems, that in the end there should be a solution,' Klingbeil said, referring to his talks with ministers from the G7 nations. However, the EU is ready and willing to take determined countermeasures if a negotiated solution with the U.S. was not found, Klingbeil said. 'In the end, for me it is about protecting jobs and companies in Europe.' Brussels is discussing countermeasures if a deal is not reached by August 1, including the so-called anti-coercion instrument, which allows the bloc to retaliate against countries that put pressure on EU members to change economic policies. Asked about this instrument in an interview with Reuters on Thursday, Klingbeil said talks are now focusing on finding a joint solution with Washington, but if it doesn't work out, the EU will act 'united and decisively.'
