One must give credit to the leaders of the coalition for seriously addressing the realignment of the federal budget in recent days. Little information has surfaced from the almost daily meetings between Olaf Scholz, Robert Habeck, and Christian Lindner. It seems clear to each of the three that, after the Federal Constitutional Court ruling nearly a month ago, the fundamental goal was to establish a new foundation for the relationships between the SPD, Greens, and Liberals. The presented result is somewhat disappointing.

Michael Hüther, Director of the German Economic Institute, pointed out that the coalition only simulates unity, referring to it as "face-saving white smoke in Berlin." This captures the situation quite well. There is still no genuine joint prioritization in the budget policy. Instead, an unfinished array of cuts in various sectors was presented: 250 million euros are being cut from the citizen's income bonus, 270 million euros in housing allowance estimates, 350 million euros in regionalization funds at the federal-state level, 70 million euros in air traffic tax, 600 million euros in contributions to the pension insurance, 480 million euros in tax benefits in forestry and agriculture. And so on. Even though some painful cuts were decided for those affected, no red line or guidelines for future budgets are apparent. The key points for the budget in 2025 are expected to be determined as early as March. Will everything start from scratch then?

The significant uncertainties in the German economy are unlikely to disappear with the decisions of the coalition. This is especially applicable to the Deutsche Bahn, which must now rely on approximately 4 billion euros in privatization proceeds to proceed with the rail expansion as scheduled next year. In addition: regarding the promised compliance with the debt brake for 2024, the coalition seems to leave some room for maneuver in light of the situation in Ukraine. The coalition partners have not yet revealed how high additional burdens from the war in that country must be for the emergency to be declared. The result of the lengthy negotiations in the Chancellery could have been a powerful restart for the second half of the legislative period. However, a genuine show of effectiveness should have looked different.