Germany's coalition reaches breakthrough on 2025 budget

The leaders of Germany's three-party coalition achieved a breakthrough on the 2025 national budget on Friday after long negotiations, dpa has learnt from government sources.

The coalition government also plans to stick with strict rules against budget deficits, known as the debt brake, in the upcoming year, government sources told dpa.

This comes after long consultations between German Chancellor Olaf Scholz, Vice Chancellor and Economy Minister Robert Habeck of the Greens and Finance Minister Christian Lindner of the pro-business Free Democratic Party (FDP).

No details of the agreement were initially made public.

The parliamentary groups of the Social Democrats and the Greens plan to meet at 7 am (0500 GMT).

Scholz, Habeck and Lindner originally planned to reach a Cabinet-level decision by Wednesday. The Cabinet is now aiming to present a budget at its meeting on July 17.

In order to meet the deadline, it was essential to reach an early agreement on the principles, as the drafting of the budget law typically takes about 10 days.

The Bundestag, the lower house of the German parliament, will begin deliberating the draft budget from mid-September, and it could be approved in November or December.