Budget and climate politicians had been looking forward to Karlsruhe with excitement: The Federal Constitutional Court has decided on the legality of the second supplementary budget of 2021 – and dealt the federal government a slap.
The Federal Constitutional Court has overturned a budget maneuver by the federal government. On Wednesday in Karlsruhe, the court upheld a lawsuit brought by the Union parliamentary group in the Bundestag and declared the corresponding addendum to the 2021 budget null and void. With the supplementary law, 60 billion euros in credit authorizations, which were originally intended to deal with the corona pandemic, were retroactively moved to the climate and transformation fund.
This special fund is used to finance modernization plans such as energy-saving building renovations, a hydrogen infrastructure or relief from energy prices. Some of this now needs to be rescheduled. The judgment will reduce the financial resources available to the fund by 60 billion euros. If commitments that have already been made can no longer be fulfilled in the foreseeable future, “this must be compensated for in other ways by the budget legislator,” as court vice-president Doris König said.
Karlsruhe complains about violation of the debt brake
The court based its decision primarily on a violation of the exemption from the debt brake. The debt brake is in the Basic Law. It is intended to limit national debt and stipulates that the federal and state governments generally balance their budgets without income from loans. A maximum of 0.35 percent of gross domestic product is permitted for the federal government to take on new debt. However, in exceptional emergency situations, the debt brake can be overridden.
The coronavirus pandemic was one such emergency. At the end of 2020, the Bundestag initially decided that 180 billion euros in new debt could be taken on for the 2021 financial year. In April 2021, this credit authorization was increased again by 60 billion euros.
At that time, the grand coalition of the Union and the SPD was still in power. However, this increase was not needed after all. In February 2022 – already under the traffic light government – the possibility of taking out loans of such amounts was finally transferred to the energy and climate fund. It is now called the Climate and Transformation Fund.
König now made it clear that the exemption from the debt brake should be interpreted more strictly. The borrowing must be traceable to the specific emergency situation and the legislative will to overcome it. The court explained that this connection was not sufficiently explained in the specific case. In addition, it is not possible to circumvent certain budget principles through special funds. Funds flowing there may only be used in the financial year for which they were made available. A supplementary budget may not be passed retroactively after the end of the financial year.
Source: Stern
I have been working in the news industry for over 6 years, first as a reporter and now as an editor. I have covered politics extensively, and my work has appeared in major newspapers and online news outlets around the world. In addition to my writing, I also contribute regularly to 24 Hours World.
