For days, people have been puzzling over the consequences of the ruling of the Federal Constitutional Court for the budget policy of the traffic light. According to consistent media reports, the Federal Ministry of Finance on Monday extended the budget freeze imposed on the Climate and Transformation Fund (KTF) to almost the entire federal budget.
Business correspondent in Berlin
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Business correspondent in Berlin.
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Important information is provided by the experts that the budget committee of the Bundestag wants to question this Tuesday. The written statements available to the F.A.Z. indicate a massive need for correction. "Just as with the 2023 budget, the draft budget for 2024 does not guarantee its constitutionality as things stand at present," writes Hanno Kube, holder of the Chair of Public Law at Heidelberg University.
According to Kube, there are many indications that credit authorizations in the Economic Stabilization Fund (WSF) amounting to 165 billion euros have "disappeared". His assessment is politically explosive. Union parliamentary group leader Friedrich Merz has already threatened to file a lawsuit in Karlsruhe against this side budget.
The threat is based not least on the assessment of the Heidelberg law professor, who was already one of the two legal representatives of the Union in the successful lawsuit against the 2021 supplementary budget. The Federal Constitutional Court ruled on Wednesday that the coalition may no longer fall back on old loan approvals in the Climate and Transformation Fund (KTF) of 60 billion euros. In addition, it has stipulated that loans and expenses must in principle be allocated to the year in which they become due.
What are the consequences of the ruling?
The German government's draft budget for 2024 does not take into account borrowing in the Climate and Transformation Fund or the Economic Stabilisation Fund, Thiess Büttner of Friedrich-Alexander-Universität Erlangen-Nürnberg notes in his statement. The economist chairs the independent advisory board of the Stability Council, which monitors the budgetary policy of the federal and state governments. It considers it necessary to review the use of all special funds in order to guarantee a constitutional budget for next year. It comes to a consolidation requirement for the coming year of 52 billion euros. In addition, according to the ruling of the Constitutional Court, the business plans of the special funds must also be adjusted for the current year.
An indication of what the ruling could mean for the current budget is given by the financial scientist Lars Feld, who is an advisor to Finance Minister Christian Lindner (FDP). Since the legislator has only been aware of the new legal situation since November 15, 2023, it can be assumed that the increased obligations to provide information in the emergency situation will only apply to the future, he writes in an F.A.Z. article. For a constitutional budget in 2023, there is no other way than to declare the emergency. The solution for the current year is therefore a supplementary budget in connection with an emergency situation. "However, the increased disclosure requirements apply for 2024 with regard to the determination of an emergency situation."
How many construction sites there are now in order to make the budget policy for the current and for the coming year constitutionally sound is made clear above all by Kube's statement. It should be taken into account that the 2024 federal budget follows on from and builds on that of the previous year. All the questions raised by the ruling already concern the 2023 budget, i.e. the elimination of the 60 billion euros from the Climate and Transformation Fund, the necessary rebooking of special funds, the unclear situation of the Economic Stabilisation Fund and developments in the countries.
"Only when a constitutional budget for 2023 has been secured can the planning for 2024 be completed – based on this," Kube warns. As long as the budget planning for 2023 is not constitutional, the 2024 budget law is "not ready for a decision". If it were nevertheless adopted, it would constitute a violation of several constitutional principles, such as the principle of democracy and the principle of representation.
Billions for Uniper
Kube is particularly critical of the WSF. Borrowing funds were also taken out for this 200 billion euro pot when the debt brake was suspended. However, only a small part of the funds were then used to finance measures in the relevant year 2022. "Very much" suggests that the remaining 165 billion euros in 2022 were neither "absorbed" nor "used" or actually "used", as would have been required under the Karlsruhe ruling. As a result, credit authorizations may have "disappeared" at the end of 2022.
This raises questions about the financing from the WSF in the current year as well as the planned financing for the first quarter of 2024, which in turn could have consequences for the core budget and compliance with the debt brake. By the end of October, according to the Federal Ministry for Economic Affairs, 31.2 billion euros had flowed out of the WSF for the energy price brakes. The government has spent around 20 billion euros on state shareholdings such as the one in Uniper, but this was already the case last year, the year of borrowing.
The Heidelberg scientist also draws attention to the special funds financed by emergency situations in Berlin, Bremen, North Rhine-Westphalia, Saarland and Schleswig-Holstein. These should also be examined "very critically" for their constitutionality. In the end, this could have consequences for the federal government, namely within the framework of fiscal equalization.