Could there be a shutdown in Germany like in the USA?

Table of contents

• What is a shutdown?
• How does the German budget crisis differ from the USA?

Budget crisis - Could there be a shutdown in Germany like in the USA?

For days, Chancellor Olaf Scholz (SPD), Vice-Chancellor Robert Habeck (Greens) and Finance Minister Christian Lindner (FDP) have been struggling behind closed doors to find a way out of the billion euro hole in the budget. Lindner puts the figure at 17 billion euros. Habeck, who is also climate protection minister, even canceled his planned trip to the World Climate Conference in Dubai. If a decision is to be made before New Year's Eve, a fundamental political decision must be made quickly, ideally before the cabinet meeting on Wednesday, so that there is still enough time for the parliamentary process.

It is also possible that an agreement in principle will be reached before Christmas, but the budget will not be passed by parliament until the beginning of 2024. Without a political agreement in principle before Christmas, a veritable government crisis looms. We know this all too well on the other side of the Atlantic. When the US government runs out of money again, the term "government shutdown" dominates the headlines - meaning a standstill in government business.

Following the ruling of the Federal Constitutional Court, could such a scenario also be imminent in Germany? The short answer is: no.

What is a shutdown?

If the members of Congress fail to reach an agreement on the US budget, government offices and agencies, among others, will remain closed. Only essential areas such as the federal police or secret services continue to operate.

How does the German budget crisis differ from the USA?

While the tug-of-war in the USA is repeated every year, mainly due to party politics - most recently under President Joe Biden - such a state of emergency is not possible in Germany. In Germany, the Basic Law (Article 111) provides for the state to remain fully functional even if a budget law is not passed on time. This is regulated by so-called provisional budget management.

The federal government is authorized to make all expenditures necessary to maintain the administration and fulfil legal obligations until the budget law is promulgated. In practice, the Federal Ministry of Finance can authorize the specialist departments to implement the draft budget that has not yet been passed up to a certain percentage as an upper limit. The US government does not have this authority in this form.

Read also:

• Body hidden in manhole - trial against 41-year-old man

1. In the midst of a budget crisis, Chancellor Scholz, Vice-Chancellor Habeck, and Finance Minister Lindner have been tirelessly working to bridge a gap of 17 billion euros in Germany's budget.
2. The German budget crisis, contrary to the annual political standoffs in the USA, does not allow for a government standstill as per the Basic Law (Article 111).
3. Despite the challenging situation, Habeck, the climate protection minister, had to cancel his trip to the World Climate Conference in Dubai, highlighting the gravity of the crisis.
4. If an agreement on the budget is not reached before Christmas in Germany, a potential government crisis could ensue, causing uncertainty in federal finances.
5. In the USA, the term "government shutdown" frequently arises when Congress fails to agree on the budget, resulting in a halt in government operations, except for essential services like the federal police and secret services.
6. Unlike Germany, where constitutional provisions enable essential functions to continue even without a passed budget, the US government does not possess the same authority for provisional budget management.
7. The Federal Constitutional Court's ruling raises questions about potential implications for social aspects, such as household budgets and the broader economic impact during a standstill or crisis in federal finances, in both Germany and the USA.

Source: www.stern.de