Germany's Coalition Government Agrees on 2025 Budget Plan

Germany's coalition government has finalized a draft budget for 2025 after prolonged negotiations. The budget adheres to the constitutional debt brake, which limits deficit spending to 0.35% of the GDP. Chancellor Scholz's Social Democrats, Minister Habeck's Greens, and Minister Lindner's Free Democrats worked together to balance future cuts and spending plans.

Germany's coalition government has agreed a draft budget for 2025 following months of negotiations and a package of measures to boost the country as a location for business, a government source told Reuters.

Chancellor Olaf Scholz's Social Democrats, Economy Minister Robert Habeck's Greens and Finance Minister Christian Lindner's Free Democrats have been battling to resolve differences over future cuts and spending plans. Lindner had stressed the importance of returning to the nation's constitutional enshrined cap on spending, known as the debt brake, and called on a number of ministries to find cuts.

A government source said that the agreed draft budget and medium-term financial planning up to 2028 adhered to the debt brake, which allows deficit spending of 0.35% of gross domestic product.