Federal Audit Office warns of further legal risks for the federal budget

According to the auditors, the federal government did not take all special funds into account when calculating the new debt - which it should have done based on the budget ruling of the Federal Constitutional Court. The report by the Federal Court of Auditors was made available to AFP and was first reported in the Handelsblatt.

The auditors also criticize the fact that the coalition with the traffic light system wants to declare an emergency situation retroactively for 2023 because otherwise it would violate the rules of the debt brake. This could "conflict with parliamentary budget law in a constitutionally questionable manner", according to the statement.

The German government had proposed to the Bundestag that an emergency situation be declared retrospectively for 2023 - with reference to the "war in Ukraine and the associated energy price shock", which was "still clearly noticeable in 2023".

The CDU/CSU's chief budget officer, Christian Haase (CDU), warned the German government of new legal problems in theHandelsblatt newspaper. The traffic light coalition must take these seriously "and not simply ignore them as in the past", he said.

The question of whether the supplementary budget is constitutional was also the focus of an expert hearing in the Bundestag's Budget Committee on Tuesday. The experts came to different conclusions.

The subsequent determination of the emergency situation is "virtually the only constitutionally compliant way to draw up a constitutionally compliant budget", said Berlin economics professor Alexander Thiele. "This budget is not only constitutional, but downright constitutionally necessary."

Opposition came from the Erlangen economist Thiess Büttner. The professor shared the findings of the Federal Court of Auditors, according to which the supplementary budget would have to take into account the special funds transferred from the budget. Büttner put their volume at 18 billion euros. The federal government's proposal was therefore "problematic".

Left Party leader Janine Wissler summed up that the hearing had made it clear "how difficult it will be for the federal government to circumvent the nonsensical debt brake". The situation "increases uncertainty and makes serious planning almost impossible", she told AFP.

The reason for the change to the 2023 budget is a budget ruling by the Federal Constitutional Court. The judges in Karlsruhe had declared certain special funds to be inadmissible in addition to the regular budget. As a result, almost 45 billion euros in additional debt must now be written into the 2023 budget. This means that the debt brake in the Basic Law will have to be suspended again this year.

Meanwhile, the coalition leaders held further confidential talks on the 2024 federal budget in order to implement the requirements of the Constitutional Court there too. For days, Federal Chancellor Olaf Scholz (SPD), Federal Finance Minister Christian Lindner (FDP) and Economics Minister Robert Habeck (Greens) have been trying to agree on a framework for the 2024 budget. Lindner had put the shortfall at 17 billion euros.

Against the backdrop of these talks, the FDP parliamentary group reaffirmed its red lines. "The debt brake is in place for 2024 and there will be no tax increases," FDP budget expert Christoph Meyer told the AFP news agency. "These two lines are well known and anchored in the coalition agreement."

Meyer criticized the demand by coalition partners SPD and the Greens to suspend the debt brake for 2024 as well. "You can't arbitrarily construct an emergency situation and increase public debt just because the state has to cut back on spending."

Commenting on the status of internal discussions on Monday evening, Scholz said that the coalition leaders were in the process of resolving the budget issues "very quickly now, so that there is clarity very quickly." He added to journalists: "We will tell you when we are ready."