Germany’s public debt has continued to increase, reaching 2,454.0 billion euros in the third quarter of 2023, according to the Federal Statistical Office (Destatis) on Thursday. This is a record high and represents an increase of 85.8 billion euros since the end of 2022. The increase is attributed to ongoing support programs to alleviate the impact of the energy crisis on citizens and companies.
The German government has suspended the debt brake, a constitutional limit on new state debt, for the fourth consecutive year due to the COVID-19 pandemic. However, next year, the government plans to comply with the debt brake by closing a budget gap of 17 billion euros through significant cost savings. This will have a major impact on green transformation projects, with the Climate and Transformation Fund (CTF) set to be reduced by 12 billion euros in 2024.
Despite the significant decrease in available funds, Chancellor Olaf Scholz has affirmed the government’s commitment to “forge ahead with the climate-neutral transformation of our country.” However, the budget cuts are expected to result in increased costs for consumers, particularly in the energy sector. The Federation of German Consumer Organizations has criticized the budget plan for creating an “imbalance at the expense of consumers.”
The planned elimination of subsidies for renewable energies and agriculture has also sparked protests. Earlier in the week, demonstrations were held in Berlin, and on Thursday, farmers blocked several highway ramps with tractors in eastern Germany. These protests highlight the growing concern and opposition to the government’s budget plans.
