Experts should help assess the consequences of the verdict. What about the energy price brakes? Can the 2024 budget be passed? And did everything go according to plan in the 2023 budget?
According to the Karlsruhe budget verdict, all of the federal government’s ancillary budgets are under scrutiny. One thing is certain so far: 60 billion euros for climate projects and the modernization of the economy have been lost. But may billions more not be available, for example for energy price caps? And what about money that has already been spent this year? Experts should help the Bundestag and the federal government with the assessment.
The Federal Constitutional Court had declared the reallocation of Corona loans to the climate and transformation fund to be null and void. The judges justified this, among other things, by saying that the federal government was not allowed to use the debt brake’s exception rule to stock up on loans.
Among other things, it is now unclear whether projects from the climate fund will have to be moved to the regular budget for 2024. The experts have different opinions as to whether the budget for the coming year can even be decided in the next few days under these circumstances.
In their previously published statements, the experts agree on one thing: the verdict will have far-reaching consequences – probably not only for the climate fund, but also for other special funds. Economics Minister Robert Habeck (Greens) sees loans for the energy price brakes as shaky – and warns of costs for citizens.
What special funds does the federal government actually have?
According to a list from the Federal Audit Office, 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 housing 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 extra well.
What happens if the fund for energy price brakes, the “double whammy”, is 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. Economics Minister Habeck therefore fears that the WSF is also wobbling.
That could be much more problematic than the climate billions, because this year alone, according to 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.
Do customers then have to pay back the aid?
It is unlikely that aid granted this year will have to be repaid. Because the federal government and the Bundestag have decided on energy price brakes – how they finance them is their problem. However, it is conceivable that the federal government will now abolish the electricity and gas price brakes prematurely. Actually, they should still be valid in spring 2024 as a safeguard, even though the prices are currently not that high. If energy prices rise again in winter, they could no longer be slowed down by the state. “Then we will have higher gas and electricity prices and district heating prices,” warned Habeck.
Will there be a clear answer at Tuesday’s hearing?
The experts’ statements were published on Monday. Most of them believe that impacts on the special fund for the energy price brakes are conceivable – but they do not comment clearly on the consequences.
What is controversial among experts is what should happen to the budget for 2024. Economist Jens Südekum does not see the core budget affected. He advises: The Bundestag should pass the budget normally, also because not all open questions about the judgment can be clarified by the end of the year. There could then be a supplementary budget next year.
Tax lawyer Hanno Kube from the University of Heidelberg, on the other hand, strongly advises against this. “The current draft of the 2024 budget law could be unconstitutional,” he warns. The Federal Audit Office considers not only the coming budget, but also this year’s budget to be “extremely problematic from a constitutional point of view” because of the energy price brake funds that have already been spent.
Does the ruling only apply to special funds in the federal government?
The federal government assumes that the ruling also applies to the budgets of the federal states. Some federal states also have debt-financed special funds that function with similar mechanisms to those in the federal government. However, the consequences are not yet certain here either.