Provisional budget rules out government shutdown
The traffic light coalition is still struggling with the 2024 budget, with the SPD parliamentary group no longer expecting it to be passed on time this year. Unlike in the USA, however, there is no threat of a government shutdown in Germany if there is no budget for the new year. This is because the Basic Law expressly provides for provisional budget management.
Without a new budget, Article 111 of the Basic Law allows the federal government to make the necessary expenditures to maintain the operation of federal authorities, to continue construction projects and procurements that have already been approved and to fulfill existing obligations. This also means that social benefits such as parental allowance or unemployment benefit can continue to be paid.
However, measures that are only in the planning stage may not generally be started. Only "in the event of an unforeseen and unavoidable need" may there be exceptions according to Article 112. The Federal Minister of Finance decides on these.
Provisional budget management is not uncommon in Germany, especially after federal elections. There is usually not enough time before the end of the year for the new parliament to form a government and approve the draft budget.
This was also the case when the traffic light coalition was formed at the end of 2021, when Finance Minister Christian Lindner (FDP) issued a decree for 2022 that limited operating expenditure to up to 45% of the previous government's draft budget - in other words, mathematically allowing spending until the middle of the year. Due to the consequences of the war in Ukraine, the 2022 budget was not passed until June - and provisional budget management ended.
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In the absence of a timely passage of the 2024 budget, Germany, unlike the USA, avoids a government shutdown due to the provisions of the Basic Law that permit provisional budget management. This provisional budget allows for the continuation of essential expenditures, including the operation of federal authorities, ongoing construction projects, procurements, and the payment of social benefits.
Source: www.ntv.de
