Decision on Germany's 2025 budget postponed, say government sources say

BERLIN (Reuters) -The German government no longer expects the cabinet to reach an agreement on the 2025 draft budget by a July 3 deadline, government sources told Reuters on Tuesday.

July 17 is being considered as the new date, which would mean that all deadlines for submitting the draft budget to the Bundestag lower house of parliament can still be met.

Finance Minister Christian Lindner told an industry association event that talks on the budget were intense and ongoing, without giving any detail about the timeframe.

"We need a turnaround in the budget, a turnaround from consumption and redistribution to structuring and investment. And that requires tough discussions," said Lindner.

A finance ministry spokesperson said the aim is still to reach a political agreement and a cabinet decision in July.

Speaking on the first day of the industry event on Monday, German Chancellor Olaf Scholz only said that the plan was to adopt the budget in July, which looked likely based on his conversations.

His Social Democrats' parliamentary group is pushing for higher new net borrowing through exemptions from the debt brake, while Lindner's Free Democrats want to adhere to the cap on new borrowing enshrined in the country's constitutional Basic Law.

(Reporting by Holger Hansen; writing by Miranda Murray; editing by Madeline Chambers and Jason Neely)