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GERMANY: Kukies Considers Potential Non-Implementation Of 2024 Suppl' Budget

GERMANY
Policy NewsCEEMEAEurozoneGermanyBulletPolitical RiskFixed Income BulletsForeign Exchange BulletsMarkets

German finance minister Kukies sees himself prepared for a set of scenarios regarding the implementation of the 2024 supplementary budget in an ARD interview on Sunday. 'Preparations are being made for both options: Either the German Bundestag will pass a supplementary budget or we will manage without one.’" … "At the moment, it also looks very good that we can get through without having to impose budget freezes" - that is Handelsblatt citing the ARD interview.

  • "Income and expenditure" were being scrutinised on a daily basis, Kukies added. Finance ministry data showed tax  receipts developing comparatively favourably in October ('German Tax Revenues In Line; Income Threshold Bill To Watch' - MNI, Nov 22).
  • Note that the supplementary 2024 budget initially was announced in July but has not passed in Bundestag before the breakdown of the traffic light coalition, and will be decisive for E11.3bln of additional net issuance in 2024 (E50.3bln instead of E39bln w/o).
  • Passing would now likely require votes from opposition leader CDU after pro-business FDP left the coalition. According to last commentary from CDU chancellor candidate Merz, his party should be compliant in voting for the supplementary budget after chancellor Scholz initiated the process for early elections (scheduled Feb 23) - so a passing remains the base case for now.
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German finance minister Kukies sees himself prepared for a set of scenarios regarding the implementation of the 2024 supplementary budget in an ARD interview on Sunday. 'Preparations are being made for both options: Either the German Bundestag will pass a supplementary budget or we will manage without one.’" … "At the moment, it also looks very good that we can get through without having to impose budget freezes" - that is Handelsblatt citing the ARD interview.

  • "Income and expenditure" were being scrutinised on a daily basis, Kukies added. Finance ministry data showed tax  receipts developing comparatively favourably in October ('German Tax Revenues In Line; Income Threshold Bill To Watch' - MNI, Nov 22).
  • Note that the supplementary 2024 budget initially was announced in July but has not passed in Bundestag before the breakdown of the traffic light coalition, and will be decisive for E11.3bln of additional net issuance in 2024 (E50.3bln instead of E39bln w/o).
  • Passing would now likely require votes from opposition leader CDU after pro-business FDP left the coalition. According to last commentary from CDU chancellor candidate Merz, his party should be compliant in voting for the supplementary budget after chancellor Scholz initiated the process for early elections (scheduled Feb 23) - so a passing remains the base case for now.