Ministry of Finance imposes budget freeze on all departments
Following the ruling of the Federal Constitutional Court on the debt brake, the Federal Ministry of Finance is pulling the ripcord: The budget freeze, which initially only applied to the Climate and Transformation Fund, is being extended to large parts of the federal budget.
The German government apparently considers the impact of the Federal Constitutional Court's ruling on the climate fund to be more serious than previously assumed. The Federal Ministry of Finance has extended the budget freeze imposed on the Climate and Transformation Fund (KTF) to almost the entire federal budget. This emerges from a letter from State Secretary for the Budget Werner Gatzer.
The FDP-led Ministry of Finance responded to an inquiry late last night, stating that commitment appropriations in the current budget would be stopped in order to avoid advance payments for future years. "Existing liabilities will continue to be honored, but no new ones may be entered into," it said. Elsewhere in the government, it was also made clear that this was not a case of Finance Minister Christian Lindner going it alone: "It has been agreed and makes sense."
Gatzer's letter states: "In order to avoid further advance payments for future financial years, I therefore intend to block all available commitment appropriations in sections 04 to 17 and 23 to 60 of the 2023 federal budget with immediate effect." Gatzer refers to paragraph 41 of the Federal Budget Code, which regulates a budget freeze. The individual budgets of all ministries are affected by the individual plans mentioned. Section 60 includes the Climate and Transformation Fund and the 200 billion euro defense shield to curb energy prices. According to the list, constitutional bodies such as the Federal President, Bundestag, Bundesrat and Federal Constitutional Court are excluded.
Exceptions for "special individual cases"
Last Wednesday, the Federal Constitutional Court stripped the federal government of 60 billion euros because the transfer of unused coronavirus loans to the climate fund was unconstitutional. The government now lacks the money. The court has also issued further clarifications on the debt brake in the Basic Law and the legality of loans, which could also have consequences for the current 2023 budget and the planned 2024 budget.
On the day the ruling was announced, Finance Minister Christian Lindner ordered a budget freeze for the climate fund only. As a result of the ruling, it is "necessary for the federal budget to review the overall budgetary situation", writes Gatzer. A release of commitment appropriations (...) requested by the ministries after the budget freeze in special individual cases can only be envisaged in the event of an objectively and temporally unavoidable need that has been set out in writing. A "particularly strict standard is applied to the proof of such a need".
Given the ruling by the Federal Constitutional Court on the debt brake, Finance Minister Christian Lindner from the Federal Ministry of Finance has extended the budget freeze initiated for the Climate and Transformation Fund to several sections of the federal budget. This decision aims to avoid further advance payments for future financial years and adheres to the budget freeze regulations outlined in section 41 of the Federal Budget Code.
The extended budget policy has significant implications for public debt management, as it affects expenditures across various sectors, including commitments in sections 04 to 17 and 23 to 60 of the 2023 federal budget. However, exceptions may be made for special individual cases with an objectively and temporally unavoidable need, as highlighted in a statement from State Secretary for the Budget Werner Gatzer.
Source: www.ntv.de
