German coalition leaders agree new compromise on 2025 budget

The leaders of Germany’s coalition government have agreed to a new compromise on the 2025 budget, a government spokesman said in Berlin on Friday.

“The requirements of the debt brake in the constitution will continue to be met,” the spokesman said, referring to strict rules against ordinary budget deficits.

The new agreement – one month after coalition leaders including Chancellor Olaf Scholz reached a preliminary deal in early July – involves the reallocation of funds for the state-owned Deutsche Bahn railway company.

This will reduce the planned 2025 deficit in government expenditure by €4.5 billion ($4.95 billion) to €12 billion.