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German chancellor Olaf Scholz has that the federal government is to reduce its spending and return to 鈥渇iscal policy normality鈥� after state support for citizens and businesses during the pandemic and energy crisis significantly increased state spending, the ARD . During his speech at the Federation of German Industries鈥� (BDI) 鈥淚ndustry Day鈥� event in Berlin on 19 July, Scholz said climate action, security policy and industrial strength will remain priorities of the government despite a return to pre-pandemic spending levels. 鈥淭his will be the logic of our budget policy over the coming years,鈥� he said. 鈥淪ome subsidy or support programmes鈥� will have to be reviewed, Scholz added, given the government鈥檚 鈥渄uty to steadily lead the country into the future after years of unparalleled debt-making.鈥� However, Scholz confirmed that 鈥淕ermany鈥檚 [energy] transformation plan stays,鈥� adding that work to transform and build hydrogen infrastructure will continue unabated. BDI head Siegfried Russwurm criticised Scholz鈥檚 administration at the event, arguing that the 鈥渄elta鈥� between governmental ambitions and achievements was growing every day. 鈥淪ome things are going in completely the wrong direction,鈥� Russwurm said, adding that bureaucratic hurdles and lengthy licensing procedures continue to pose challenges for industry. The chancellor replied that energy costs could have already been significantly lower if expansion of renewable power and grid infrastructure had not slowed in recent years.

Finance minister Christian Lindner from the low-tax, pro-business Free Democrats (FDP) recently sent a letter to ministerial colleagues outlining the need for each department to save money in the coming years, in order to close a budget deficit of about 20 billion euros. However, planned investments in climate action, industry resilience, housing, transport infrastructure, the military, and social support programmes mean that many ministries project spending increases in the near future.