Karlsruhe ruling gives future finance ministers more financial leeway
The ruling of the Federal Constitutional Court on the Climate and Transformation Fund (KTF) provides the federal budget with significantly more financial leeway - but only in the next legislative periods. The reason for this is that the ruling allows the federal government to take out far fewer emergency loans, resulting in fewer repayments in future years than previously estimated.
According to calculations by the Bundesbank, quoted by "Der Spiegel", the emergency loans originally amounted to 538 billion euros, but have now been reduced to 340 billion euros.
In recent years, the federal government was allowed to take out far more new loans than stipulated by the debt brake because it declared an emergency situation due to the coronavirus pandemic and the war in Ukraine, thereby suspending the strict requirements of the debt brake rule. He parked some of these funds in ancillary budgets, which must be cut or dissolved following the Karlsruhe ruling.
This includes 60 billion euros of unused corona aid, which Federal Finance Minister Christian Lindner (FDP) had initially shifted to the KTF. 183 billion in emergency loans from the Economic Stabilization Fund (WSF) and the flood relief fund for the Ahr valley will also be eliminated.
This is offset by 45 billion euros in fresh emergency loans for the current year, which Lindner used to legalize the withdrawals from the secondary budgets after the ruling. According to the report, this leaves 340 billion euros for repayment, 198 billion euros less than originally planned.
Repayment of the emergency loans from the core budget, which mainly stem from the pandemic period, will therefore begin in 2028 in 31 annual installments. According to Der Spiegel, around nine billion euros will be due each year. The Federal Ministry of Finance (BMF) had originally set repayment installments of 11.6 billion euros for this period.
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The Karlsruher ruling, made by the Federal Constitutional Court regarding the Climate and Transformation Fund (KTF), expands the financial scope of future German finance ministers by reducing the need for emergency loans, as outlined in the judgment. As a result, German finance ministers will have fewer loan repayments to make in future years, thanks to the reduced loan amount deemed allowable following the court's decision.
Source: www.ntv.de
