NAfter the game is before the game: Opposition leader Friedrich Merz (CDU) is threatening the traffic light government with another trip to Karlsruhe in the dispute over the 2024 budget. According to Merz, the fundamental judgment on the debt brake, which the Union parliamentary group won on Wednesday, means “the end of all shadow budgets that are financed by debt”. If the traffic light coalition does not adjust its budget planning accordingly, they will again go to the Federal Constitutional Court to force compliance with the Karlsruhe guidelines on debt. The Union is still examining whether there is reason to do so. To do this, the Christian Democrats also want to wait for the expert hearing in the Finance Committee scheduled for Tuesday.
Merz and CSU regional group leader Alexander Dobrindt are particularly critical of the Economic Stabilization Fund (WSF). This special fund is based on a similar structure to the climate and transformation fund, into which the traffic light government had moved – unconstitutionally, as has now been established – unneeded credit authorizations amounting to 60 billion euros from the Corona period.
The economic stabilization fund dates back to spring 2020, when the then ruling grand coalition set up Corona aid for the economy. The WSF supported large companies such as Lufthansa and TUI with loans and equity. Last fall, the additional budget was given a new purpose: the traffic light coalition decided to use it to cushion the consequences of the energy crisis for citizens and companies. For this purpose, the fund was provided with credit authorizations amounting to 200 billion euros.
A lot of money has already flowed
Since gas and electricity prices have fallen faster than expected, only part of the money provided is needed. According to the Ministry of Finance, almost 19 billion euros were spent by the end of August to finance the gas price brake, including emergency aid last December, and 13.6 billion euros were spent on the electricity price brake. In addition, there are the federal government’s investments in energy companies such as Uniper. A total of 20.6 billion euros were spent on this.
The energy price support should continue until March 31, 2024, the Bundestag decided on Thursday evening. However, it is uncertain whether the extension will actually take effect. As a precautionary measure, the householders have blocked the WSF after the Federal Constitutional Court’s ruling until it becomes clear to what extent it is also affected by the Karlsruhe judge’s ruling. If the Union were to actually take this fund to the Constitutional Court and win, the government would be faced with an even bigger problem than it already is. While the money from the Climate and Transformation Fund will only be spent in the coming years, the grants from the WSF have long since ended up in the accounts of citizens and companies.
In its ruling on the Climate and Transformation Fund, the Federal Constitutional Court commented on the content requirements and limits resulting from the constitutional requirements for the debt brake for new borrowing in exceptional emergency situations. As an unwritten requirement, the Second Senate demands a connecting line between the emergency situation and the exceeding of the actually permissible debt limit.
There must be a concrete emergency situation
The extraordinary borrowing must be directly attributable to the specific emergency situation – including the amount. This so-called causal connection was developed in legal literature and has already been adopted in judgments at the state constitutional level. So it is not a Karlsruhe invention.
But it is now clear that all future procedures for complying with the debt brake must be measured by whether emergency borrowing can be traced back to the respective emergency. The Constitutional Court grants politicians “leeway for assessment and judgment”.
But in the case of the 60 billion euros for the climate and transformation fund, that didn’t help the traffic lights. According to the Constitutional Court, the legislature had failed to provide a convincing justification for the connection between the Corona crisis and the promotion of climate protection and transformation with the emergency loans. Should the WSF end up in Karlsruhe, the court will also take a close look at this special fund to see whether the legislature provides a sufficiently viable justification for the extra-regular borrowing.
In future debt brake proceedings, the Constitutional Court will also examine whether the budget principles have been adhered to. Above all, this means that credit authorizations must not be “stashed” so that the government can then use them in later budget years. From the point of view of the Union faction, the sword of Damocles of unconstitutionality also hangs over the WSF, primarily because of these requirements.
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