Germany’s New Finance Chief Rules Out Federal Funding Freeze

(Bloomberg) -- Germany’s new finance minister dismissed fears the political turmoil in Berlin will trigger a funding freeze, pledging the federal government will be fully capable of functioning in the weeks before February’s early election.

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Joerg Kukies, appointed last week after Chancellor Olaf Scholz fired his predecessor and brought a premature end to the ruling coalition, said it’s still unclear whether Scholz’s minority government can get a supplementary budget for this year and the 2025 finance plan approved in parliament.

To do so, they’ll need the votes of opposition lawmakers. Friedrich Merz, the leader of the center-right CDU/CSU alliance, signaled earlier Tuesday the group may be willing to cooperate on this year’s budget, but Kukies said the situation remained very much in flux.

He conceded that it’s “not realistic” that the 2025 budget will get approval by the end of the year, meaning the government will be forced to resort to a temporary finance planning process to keep funds flowing.

While it’s not an ideal state of affairs and some new projects may face delays, Kukies said it’s not technically problematic and has happened multiple times before, including earlier this year after a constitutional court ruling upended the government’s finances.

The government “can and will fulfill all of its commitments,” he told delegates at a Sueddeutsche Zeitung forum in Berlin. He’s due to attend a meeting of the Bundestag’s budget committee on Wednesday.

Germany was tipped into political crisis last week after Social Democrat Scholz fired Finance Minister Christian Lindner of the Free Democratic Party due to a dispute over how to fund aid for Ukraine.

The shock move meant the three-party governing alliance, which included the Greens, lost its majority in the lower house of parliament, or Bundestag.

Scholz’s Social Democrats and Merz’s conservatives agreed earlier Tuesday to bring the election forward by seven months to February.

Kukies said this year’s finance planning will be made easier as the government can redirect a €4 billion ($4.2 billion) slice of an unused subsidy worth around €10 billion earmarked for a planned Intel Corp. facility in eastern Germany. Intel announced in September it was postponing the new factory.

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