Federal finances - "Shutdown" as in the USA also possible for German budget?
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? 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 will continue to operate.
How is Germany different? 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 departments to implement the unapproved budget bill up to a certain percentage as an upper limit. The US government does not have this authority in this form.
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The concept of a "shutdown" affecting federal finances, as seen in the USA, raises questions about its potential applicability in the context of Germany's budget. Unlike the USA, where a government shutdown can occur if Congress cannot agree on the budget, Germany's Basic Law (Article 111) ensures the state's continued functionality even during budget delays through provisional budget management. In this system, the federal government has the power to authorize necessary expenditures and departmental actions until the budget law is passed.
This contrasts with the situation in the USA, where the federal government does not have the same level of authority to manage expenditures and implement budgets during a standstill. The Bundestag, or German parliament, plays a crucial role in the budget process, with both chambers required to pass the budget before it becomes law.
Meanwhile, discussions about federal finances in the USA are often marred by political divisions, as demonstrated by recent standstills under President Biden. In Germany, however, politically-motivated budget stalls are not as common, thanks to the country's constitutional framework.
In both nations, household budgets may feel the ripples of federal finances' instability. While a government shutdown in the USA can lead to temporary closures and service disruptions, the German system aims to minimize such impacts by maintaining essential services and allowing for provisional budgetary measures. In summary, the shutdown mechanism that has become a recurring issue in the USA's federal finances is largely circumvented in Germany due to its constitutional provisions.
In light of these differences, the possibility of a federal government shutdown in Germany is far less likely than in the USA. This distinction underscores how constitutional frameworks can significantly shape national budget processes and their potential for standstills.
Source: www.stern.de
