The German government, led by the coalition of SPD, Greens, and FDP, has reached a tentative agreement on the 2025 federal budget, yet a significant financial gap remains.

Despite extensive negotiations, a 12 billion euro shortfall persists, down from an initial 17 billion.

The coalition's plan includes reallocating funds to the Deutsche Bahn and increasing payments from energy company Uniper.

However, legal concerns have forced the government to abandon some financial maneuvers, such as repurposing KfW funds.

The budget, which aims to adhere to Germany's constitutional debt brake, will now proceed to parliamentary discussions.

Critics argue that the coalition's approach lacks transparency and sustainability, while the government remains optimistic about closing the gap through economic growth.