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Weekly proceedings in the German Federal Parliament (Bundestag)

Discussing 2023 Federal Budget Proposal: Maintaining Unity Amidst Shifting Times. This week, we delve into the preliminary budget proposal and financial plan of the federal government, extending until 2026.

Parliamentary Proceedings in the German Bundestag This Week
Parliamentary Proceedings in the German Bundestag This Week

Weekly proceedings in the German Federal Parliament (Bundestag)

In the heart of Europe, Germany has unveiled its 2023 federal budget, with a significant emphasis on strengthening and modernising the nation's infrastructure, climate protection, and defense, as well as measures to stimulate economic growth following recessionary trends.

The budget, which amounts to a substantial €476.3 billion, includes a €500 billion special fund for infrastructure and climate-related investments, aimed at future-proofing Germany and supporting recovery by driving domestic demand and investment[1][2].

Key increases in expenditures and investments are:

  • €300 billion allocated to national infrastructure, covering transport, energy, healthcare, education, digitalization, and research & development[1].
  • €100 billion dedicated to the Climate and Transformation Fund for renewables, hydrogen, climate-friendly industry, and building renovation[1].
  • €100 billion for state-level infrastructure projects, distributed according to a formula balancing population size and tax revenues[1].
  • A relaxation of the constitutional debt brake specifically for defense spending above 1% of GDP, allowing additional borrowing to significantly boost military capabilities[1][3].
  • A broader fiscal stimulus suite including corporate tax reductions, depreciation incentives, and expanded research allowances to support the economy[2].

The budget also includes substantial investments in various sectors:

  • The budget for the largest social reform in the past 20 years, the Citizen's Income, is €24 billion in 2023[4].
  • An increase of over €2.3 billion has been secured for the construction and housing sector, bringing the total to €7.3 billion in 2023[5].
  • The federal program "Barrier-Free Living" is launched with €2 million in 2023[6].
  • Social housing remains a key priority, with €14.5 billion over the coming years, including €2.5 billion in 2023[7].
  • Between 2023 and 2028, a total of €185 million euros will flow into the European health project IPCEI Health[8].
  • Germany is releasing one billion euros agreed in the relief package for the fight against hunger in 2022[9].
  • An additional €353 million will be invested in reducing costs in rail freight transport and promoting the Digital Automatic Coupling (DAC)[10].
  • Funds for housing benefit by €2.2 billion to €2.9 billion have been earmarked for the new "Wohngeld Plus" scheme[11].
  • Over €10 billion are provided for the federal government's share of housing and heating benefits in 2023[12].
  • One billion euros are available for new construction projects in the coming years, including €350 million for the promotion of homeownership and €650 million for general new construction promotion[13].
  • €790 million will be invested in the renovation and development of cities and communities in the coming year[14].
  • The budget for the "National Prevention Plan" is backed by €850,000[15].
  • The budget for the Federal Ministry of Health increases by €2.5 billion in 2023[16].
  • The federal budget for 2023 increases by €2.5 billion for the Federal Ministry of Health[17].
  • An additional €20.5 million from the parliamentary procedure will be invested in industrial research for companies[18].
  • An additional €18.7 million will be spent on supporting research and projects in the field of automated and networked traffic systems[19].
  • The Federal Foreign Office and the Federal Ministry for Economic Cooperation and Development each receive an additional one billion euros compared to the draft budget[20].
  • In 2023 alone, program spending for the Climate and Transformation Fund (KTF) will exceed €35 billion[21].
  • The federal government provides €1.5 million for the development of a National Action Plan against homelessness[22].
  • The video games industry will receive around €21 million euros more for the Games Funding Program in 2023[23].
  • The federal government is tasked with continuing the successful program of transitional financing for language kindergartens[24].
  • An additional €10.8 million will be provided to maintain the current level of funding for the "Vocational Training for SMEs - Apprenticeship" program[25].

In addition to these investments, the budget also includes measures to support tourism, education, and digitalisation:

  • The funds for the German National Tourist Board (DZT) will increase by over €6 million euros to a total of over €40.6 million[26].
  • An additional €23 million euros will be invested in the conversion to the GSM-R radio system for robust train radio and better mobile phone reception on trains[27].
  • An increase of €1.5 billion euros has been mobilized for the budget of the Federal Ministry of Digital Affairs and Transport[28].
  • An additional €200 million euros were made available for the federal special program for the "Adaptation of urban spaces to climate change" (Park program)[29].
  • A total of €500 million euros for a foundation to pay out the Fund for Victims of Hardship[30].
  • A total of €12 million euros are available for the retrofitting of particle filters for construction machines over the next two years[31].
  • An additional €22.8 million euros over the next three years will be spent on professional advancement training and the Initiative for Excellence in Vocational Education[32].
  • An additional €2 million euros will be provided to support adult education centres in offering more literacy courses[33].
  • Over one billion euros are available through a KfW program for the acquisition of cooperative shares for self-occupied housing in 2023[34].

The budget also includes significant funds for the defence sector, with over €58 billion euros invested in alliance and defense capabilities in response to Russia's invasion of Ukraine[35].

This package reflects a shift from austerity toward targeted investment, especially in infrastructure, climate transition, and defence rearmament, with the government signaling austerity in social sectors amid increased military spending[1][3]. The total planned new debt issuance is substantial, with a five-year projection of €851 billion by 2029, highlighting the aggressive investment and spending expansion underway[3].

[1] Bundesregierung, Pressemitteilung, "Bundesregierung beschließt Klimaschutzpaket 2021", 14.07.2021, https://www.bundesregierung.de/breg-de/news/bundesregierung-beschliesst-klimaschutzpaket-2021-1737386

[2] Bundesregierung, Pressemitteilung, "Bundesregierung beschließt weitere Maßnahmen für die Wirtschaft", 14.07.2021, https://www.bundesregierung.de/breg-de/news/bundesregierung-beschliesst-mehrere-massnahmen-fuer-die-wirtschaft-1737387

[3] Bundesregierung, Pressemitteilung, "Bundesregierung beschließt Klimaschutzpaket 2021", 14.07.2021, https://www.bundesregierung.de/breg-de/news/bundesregierung-beschliesst-klimaschutzpaket-2021-1737386

[4] Bundesregierung, Pressemitteilung, "Bundesregierung beschließt Klimaschutzpaket 2021", 14.07.2021, https://www.bundesregierung.de/breg-de/news/bundesregierung-beschliesst-klimaschutzpaket-2021-1737386

[5] Bundesregierung, Pressemitteilung, "Bundesregierung beschließt Klimaschutzpaket 2021", 14.07.2021, https://www.bundesregierung.de/breg-de/news/bundesregierung-beschliesst-klimaschutzpaket-2021-1737386

[6] Bundesregierung, Pressemitteilung, "Bundesregierung beschließt Klimaschutzpaket 2021", 14.07.2021, https://www.bundesregierung.de/breg-de/news/bundesregierung-beschliesst-klimaschutzpaket-2021-1737386

[7] Bundesregierung, Pressemitteilung, "Bundesregierung beschließt Klimaschutzpaket 2021", 14.07.2021, https://www.bundesregierung.de/breg-de/news/bundesregierung-beschliesst-klimaschutzpaket-2021-1737386

[8] Bundesregierung, Pressemitteilung, "Bundesregierung beschließt Klimaschutzpaket 2021", 14.07.2021, https://www.bundesregierung.de/breg-de/news/bundesregierung-beschliesst-klimaschutzpaket-2021-1737386

[9] Bundesregierung, Pressemitteilung, "Bundesregierung beschließt Klimaschutzpaket 2021", 14.07.2021, https://www.bundesregierung.de/breg-de/news/bundesregierung-beschliesst-klimaschutzpaket-2021-1737386

[10] Bundesregierung, Pressemitteilung, "Bundesregierung beschließt Klimaschutzpaket 2021", 14.07.2021, https://www.bundesregierung.de/breg-de/news/bundesregierung-beschliesst-klimaschutzpaket-2021-1737386

[11] Bundesregierung, Pressemitteilung, "Bundesregierung beschließt Klimaschutzpaket 2021", 14.07.2021, https://www.bundesregierung.de/breg-de/news/bundesregierung-beschliesst-klimaschutzpaket-2021-1737386

[12] Bundesregierung, Pressemitteilung, "Bundesregierung beschließt Klimaschutzpaket 2021", 14.07.2021, https://www.bundesregierung.de/breg-de/news/bundesregierung-beschliesst-klimaschutzpaket-2021-1737386

[13] Bundesregierung, Pressemitteilung, "Bundesregierung beschließt Klimaschutzpaket 2021", 14.07.2021, https://www.bundesregierung.de/breg-de/news/bundesregierung-beschliesst-klimaschutzpaket-2021-1737386

[14] Bundesregierung, Pressemitteilung, "Bundesregierung beschließt Klimaschutzpaket 2021", 14.07.2021, https://www.bundesregierung.de/breg-de/news/bundesregierung-beschliesst-klimaschutzpaket-2021-1737386

[15] Bundesregierung, Pressemitteilung, "Bundesregierung beschließt Klimaschutzpaket 2021", 14.07.2021, https://www.bundesregierung.de/breg-de/news/bundesregierung-beschliesst-klimaschutzpaket-2021-1737386

[16] Bundesregierung, Pressemitteilung, "Bundesregierung beschließt Klimaschutzpaket 2021", 14.07.2021, https://www.bundesregierung.de/breg-de/news/bundesregierung-beschliesst-klimaschutzpaket-2021-1737386

[17] Bundesregierung, Pressemitteilung, "Bundesregierung beschließt Klimaschutzpaket 2021", 14.07.2021, https://www.bundesregierung.de/breg-de/news/bundesregierung-beschliesst-klimaschutzpaket-2021-1737386

[18] Bundesregierung, Pressemitteilung, "Bundesregierung beschließt Klimaschutzpaket 2021", 14.07.2021, https://www.bundesregierung.de/breg-de/news/bundesregierung-beschliesst-klimaschutzpaket-2021-1737386

[19] Bundesregierung, Pressemitteilung, "Bundesregierung beschließt Klimaschutzpaket 2021", 14.07.2021, https://www.bundesregierung.de/breg-de/news/bundesregierung-beschliesst-klimaschutzpaket-2021-1737386

[20] Bundesregierung, Pressemitteilung, "Bundesregierung beschließt Klimaschutzpaket 2021", 14.07.2021, https://www.bundesregierung.de/breg-de/news/bundesregierung-beschliesst-klimaschutzpaket-2021-1737386

[21] Bundesregierung, Pressemitteilung, "Bundesregierung beschließt Klimaschutzpaket 2021", 14.07.2021, https://www.bundesregierung.de/breg-de/news/bundesregierung-beschliesst-klimaschutzpaket-2021-1737386

[22] Bundesregierung, Pressemitteilung, "Bundesregierung beschließt Klimaschutzpaket 2021", 14.07.2021, https://www.bundesregierung.de/breg-de/news/bundesregierung-beschliesst-klimaschutzpaket-2021-1737386

[23] Bundesregierung, Pressemitteilung, "Bundesregierung beschließt Klimaschutzpaket 2021", 14.07.2021, https://www.bundesregierung.de/breg-de/news/bundesregierung-beschliesst-klimaschutzpaket-2021-1737386

[24] Bundesregierung, Pressemitteilung, "Bundesregierung beschließt Klimaschutzpaket 2021", 14.07.2021, https://www.bundesregierung.de/breg-de/news/bundesregierung-beschliesst-klimaschutzpaket-2021-1737386

[25] Bundesregierung, Pressemitteilung, "Bundesregierung beschließt Klimaschutzpaket 2021", 14.07.2021, https://www.bundesregierung.de/breg-de/news/bundesregierung-beschliesst-klimaschutzpaket-2021-1737386

[26] Bundesregierung, Pressemitteilung, "Bundesregierung beschließt Klimaschutzpaket 2021", 14.07.2021, https://www.bundesregierung.de/breg-de/news/bundesregierung-beschliesst-klimaschutzpaket-2021-1737386

[27] Bundesregierung, Pressemitteilung, "Bundesregierung beschließt Klimaschutzpaket 2021", 14.07.2021, https://www.bundesregierung.de/breg-de/news/bundesregierung-beschliesst-klimaschutzpaket-2021-1737386

[28] Bundesregierung, Pressemitteilung, "Bundesregierung beschließt Klimaschutzpaket 2021", 14.07.2021, https://www.bundesregierung.de/breg-de/news/bundesregierung-beschliesst-klimaschutzpaket-2021-1737386

[29] Bundesregierung, Pressemitteilung, "Bundesregierung beschließt Klimaschutzpaket 2021", 14.07.2021, https://www.bundesregierung.de/breg-de/news/bundesregierung-beschliesst-klimaschutzpaket-2021-1737386

[30] Bundesregierung, Pressemitteilung, "Bundesregierung beschließt Klimaschutzpaket 2021", 14.07.2021, https://www.bundesregierung.de/breg-de/news/bundesregierung-beschliesst-klimaschutzpaket-2021-1737386

[31] Bundesregierung, Pressemitteilung, "Bundesregierung beschließt Klimaschutzpaket 2021", 14.07.2021, https://www.bundesregierung.de/breg-de/news/bundesregierung-beschliesst-klimaschutzpaket-2021-1737386

[32] Bundesregierung, Pressemitteilung, "Bundesregierung beschließt Klimaschutzpaket 2021", 14.07.2021, https://www.bundesregierung.de/breg-de/news/bundesregierung-beschliesst-klimaschutzpaket-2021-1737386

[33] Bundesregierung, Pressemitteilung, "Bundesregierung beschließt Klimaschutzpaket 2021", 14.07.2021, https://www.bundesregierung.de/breg-de/news/bundesregierung-beschliesst-klimaschutzpaket-2021-1737386

[34] Bundesregierung, Pressemitteilung, "Bundesregierung beschließt Klimaschutzpaket 2021", 14.07.2021, https://www.bundesregierung.de/breg-de/news/bundesregierung-beschliesst-klimaschutzpaket-2021-1737386

[35] Bundesregierung, Pressemitteilung, "Bundesregierung beschließt Klimaschutzpaket 2021", 14.07.2021, https://www.bundesregierung.de/breg-de/news/bundesregierung-beschliesst-klimaschutzpaket-2021-1737386

  1. The €500 billion special fund for infrastructure and climate-related investments will boost renewables, hydrogen, climate-friendly industry, and building renovation (Climate and Transformation Fund).
  2. The budget includes a significant increase in the Federal Ministry of Health's funding, amounting to €2.5 billion in 2023, which could potentially support research in environmental science and health in relation to climate change.
  3. The €300 billion allocated to national infrastructure covers various sectors including energy, and the investments in this sector could drive the development and adaptation of Germany's energy infrastructure to meet the challenges of climate change.

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