After a month, the Cabinet of Ministers of Germany plans to approve the budget for 2025, in particular, significantly reducing military assistance to Ukraine. The government expects a strong economic exaltation to reduce a break of 17 billion euros between predicted expenditures and income, but economic realities require rigid decisions over financial priorities.
Reduction of military assistance to Ukraine
The draft budget for 2025 provides for the reduction of military assistance to Ukraine to € 4 billion, which is a significant decrease compared to approximately 8 billion euros in 2024. This decision is caused by the need to balance the budget in the context of economic challenges that Germany faces.
The greatest euro area economy escaped recession at the beginning of the year, but the growth was slower than expected. The German government, like other countries, has faced the need to close a budget hole. In 2028, a deficit of € 39 billion is expected in a regular budget, and 28 billion euros are required to achieve the NATO goal without a special fund.
Finance Minister Christian Lindner insists on the period of fiscal consolidation after higher expenses during the COVID-19 pandemic and a recent energy crisis. The new rules of the European Union also limit the budget potential of Germany, requiring harsh adjustments.
"I expect that every Member State will follow our fiscal rules," Lindner said. "In our common interests, to maintain the stability of our public debt."
The reach of the budget agreement and the long -awaited package of stimulating the economy has become a serious test for a coalition, which is often accused of internal differences. In the European elections in June, the ruling parties in the Coalition Government of Germany failed, giving way to the right -wing party "Alternative for Germany".
German Minister Boris Pistorius has already invited additional funding for Ukraine to help Ukraine another 4 billion euros in the second half of 2024, since much of the allocated 7 billion euros have already been spent or tied to contracts. However, budget realities force Germany to overestimate their financial opportunities and priorities.
