faq
The Karlsruhe ruling on the supplementary budget for 2021 has wider implications: the budget committee’s adjustment meeting planned for tomorrow has been cancelled. The federal government continues to look for solutions. What’s next?
the initial situation
With the ruling of the Federal Constitutional Court, the traffic light government lost parts of its financial planning. The Constitutional Court had declared the reallocation of funds in the 2021 budget to be null and void. The money was approved as a Corona loan, but was subsequently intended to be used for climate protection and the modernization of the economy. Nothing will come of this and the question of how the resulting gap should be filled remains open.
It is also unclear when the budget for the coming year will be decided. The Budget Committee was actually supposed to approve it this Thursday, and it was supposed to be passed in the Bundestag on December 1st. But that won’t happen now.
How much money is definitely missing?
The second supplementary budget law for 2021 was specifically declared void. This means: The 60 billion euros transferred to the Climate and Transformation Fund (KTF) are not available. This is a significant part of the fund; in total it should contain 211.8 billion euros by 2027. It is still unclear which climate measures need to be postponed, financed differently or even canceled.
But the impact of the ruling is even greater: the judges also decided that the state cannot reserve emergency loans for later years. Instead, an emergency must be declared every year. The federal government is now also examining the effects of the ruling on other parts of its financial policy. However, there is widespread agreement among politicians and experts that other special assets could be affected.
What if “Doppelwumms” is also affected?
Similar to the Climate and Transformation Fund, which was criticized by the Federal Constitutional Court, the Economic Stabilization Fund (WSF) was essentially provided with loans in reserve. The federal government approved loans totaling 200 billion euros in 2022 to cushion the high prices for electricity, gas and district heating. He was able to do this because the debt brake was suspended this year due to the Corona emergency and the war in Ukraine. The money should not only be used in 2022, but also in 2023 and 2024.
The WSF could be even more problematic than the climate billions, because this year alone, according to information from the Ministry of Economic Affairs, 67 billion euros in WSF loans were paid out. According to the Finance Ministry’s plans, around 103 billion should have been carried over into the coming year.
What does this mean for the budget now?
The traffic light coalition has so far been able to spend additional money through additional budgets and still comply with the debt brake. But after the Karlsruhe ruling, this no longer works. According to the experts and also the Ministry of Finance, the federal government has spent money this year that it did not have at its disposal.
Against this background, the adjustment meeting for the 2024 budget planned for tomorrow has been cancelled. The last week of the Bundestag session is from December 11th to 15th. The budget could therefore be decided this year. It is unclear whether this will happen. However, if the deadline was shortened in the Federal Council, a decision would theoretically still be possible.
What special funds does the federal government have overall?
One List of the Federal Audit Office According to this, the federal government currently maintains 29 special funds. These additional budgets are not an invention of the traffic light government: the oldest dates back to 1951 and supported the construction of apartments for miners. For example, there are also funds for the participation of severely disabled people in working life, an inland shipping fund, a special fund for the expansion of daycare places and one for digital infrastructure.
The latest special funds are economic aid because of the Corona crisis, development aid for flood victims, the 100 billion euro special pot for the Bundeswehr and the pot for energy price brakes after the Russian attack on Ukraine.
Could everyone be affected by the Karlsruhe ruling?
No – and for several reasons. On the one hand, the Federal Constitutional Court only commented on debt-financed special funds. But there are also pots that finance themselves through their own income. One example is the so-called ERP special fund, which was originally provided with funds from the Marshall Plan.
According to the Court of Auditors, the majority of the special funds are financed by loans – at the end of 2022 there was still a debt potential of around 522 billion euros. In principle, special assets that were created before the introduction of the debt brake should also be excluded from the budget ruling. Article 143d of the Basic Law stipulates that only loan authorizations that were approved after 2010 are counted towards the debt brake.
What about the money for the Bundeswehr?
According to the current opinion in the traffic light coalition, this is also not affected. The reason is that the Bundestag anchored the pot filled with loans amounting to 100 billion euros separately in the Basic Law. With the consent of the Union, the constitution not only stipulates what the money can be used for, but also that the debt brake does not apply here. The FDP in particular had insisted on this in order to secure the funds.
What happens now?
The government says there is confidence. We are working hard on a good solution. But what will it look like? In addition to various proposals for budget savings, consideration is apparently being given to quickly declaring an emergency for 2023.
Such a decision makes it possible to use an exception to the debt brake and subsequently justify the loans that have already been issued. Because: According to Article 115 of the Basic Law, the state may incur debts “in the event of natural disasters or exceptional emergency situations that are beyond the state’s control and significantly affect the state’s financial situation.” Whether such a situation exists is controversial. The danger would be another and possibly successful lawsuit in Karlsruhe.
For other proposed solutions such as a special climate fund or a reform of the debt brake, the traffic light coalition would need a two-thirds majority, both of which affect the Basic Law. The parliamentary managing director Thorsten Frei (CDU) has already made it clear: the government does not need to hope for votes from the Union here.