Weekly happenings at the Federal Diet (Bundestag)

Germany's 2023 Federal Budget Focuses on Sustainable Growth and Climate Neutrality

The German federal government has unveiled its draft budget for 2023 and the financial plan until 2026, with a total revenue and expenditure of 445.2 billion euros. This budget emphasises several key investment areas and initiatives aligned with future development, climate neutrality, digital infrastructure, housing, international responsibility, and social cohesion.

Future Investments and Infrastructure

The government has established a €500 billion Infrastructure Special Fund, with €150 billion allocated for infrastructure investments between 2025 and 2029. This includes €100 billion earmarked specifically for federal states and municipalities to address significant municipal infrastructure financing needs. Another €100 billion is dedicated to the Climate and Transformation Fund, underlining a strong focus on climate-oriented infrastructure.

Climate Neutrality

Germany aims for climate neutrality by 2045, with intermediate targets of a 65% reduction in greenhouse gas emissions by 2030 and 80% by 2040. The budget supports this through investments in renewable energy, energy efficiency, and a comprehensive climate protection program spanning several sectors including energy, transportation, and industry.

Digital Infrastructure

Investments are planned in AI, cloud technologies, and digital sovereignty with ambitions for at least one European AI gigafactory in Germany. The government also supports creating a domestic technology stack alongside compliance with EU digital regulations.

Housing

Specific housing investments are indicated through increased energy efficiency standards for new buildings and subsidies for modern heating systems, such as replacing gas boilers with heat pumps.

International Responsibility and Social Cohesion

The budget includes measures to shield consumers from rising energy costs through subsidies, tax reductions, and direct payments to households, supporting social cohesion amid economic challenges. Additionally, Germany has taken an active role in energy security, exemplified by its management of Gazprom Germania to ensure stable energy supply under geopolitical tensions.

Energy and Grid Expansion

A major investment area is the modernization and expansion of the power grid to accommodate renewable energy integration and meet the target of 80% renewable electricity consumption by 2030. Projects include expanding approximately 14,000 kilometers of new power lines with advanced HVDC technology between northern and southern Germany and expanding charging infrastructure and energy storage.

Decarbonization of Industry

The government is increasing funding for the decarbonization of industry by one billion to 2.2 billion euros. This includes investments for the Bundeswehr's equipment, with 50.1 billion euros provided and a special fund "Bundeswehr" initiated in the amount of 100 billion euros. The Bundeswehr procurement acceleration law passed before the summer break will allow for investing funds for the equipment of the Bundeswehr more quickly.

Humanitarian Aid and Development Cooperation

Two billion euros are available for humanitarian aid. The federal government remains the second-largest donor nation, with over 22 billion euros in public spending on development cooperation (ODA spending).

Transport Investments

More money will be invested in rail than in the road for transport. Transport investments will increase to around 20.8 billion euros by 2026.

Microelectronics

A total of 4.26 billion euros is provided for future projects in the field of microelectronics.

Infection Protection

Infection protection in care and integration facilities and companies is being strengthened. The Covid-19 Protection Act is being supplemented with protection measures for fall and winter, including the obligation to wear masks in long-distance traffic.

Ukraine Support

Russia has been attacking Ukraine for more than six months, and Germany, along with its EU and NATO partners, stands with Ukraine militarily, financially, diplomatically, and humanitarianly.

Energy Subsidies for Energy-Intensive Companies

Through the Climate and Transformation Fund (KTF), the government is increasing subsidies for energy-intensive companies to offset emissions trading-related electricity price increases - from 944 million to 2.5 billion euros.

Budget Extension for Health Ordinance

The Act provides for an extension of the legal basis for the Federal Ministry of Health's (BMG) corona vaccination and testing ordinance until December 31, 2022.

Investment Expenditures

In 2023, investment expenditures will exceed 58 billion euros. Future investments to be maintained at around 52 billion euros annually over the financial planning period.

These initiatives collectively emphasize Germany's commitment to sustainable growth, climate goals, social equity, and technological advancement through targeted federal budget investments beginning in 2023.

The German government has set aside €100 billion for the Climate and Transformation Fund, showcasing a strong focus on climate-oriented infrastructure as part of the country's plan for climate neutrality.
The budget supports the decarbonization of industry with an increase in funding by one billion to 2.2 billion euros.
In the realm of environmental science, investments are being made for at least one European AI gigafactory in Germany, in addition to AI, cloud technologies, and digital sovereignty.
To maintain energy stability in politics and general news, several energy subsidies have been introduced, including those for energy-intensive companies to offset emissions trading-related electricity price increases.