German Finance Ministry imposes budget freeze on ministries

German Finance Ministry imposes budget freeze on ministries

Currently, it is not permitted to take on new responsibilities; the “global domestic economic situation” must be verified.

The German federal government apparently assesses the effects of the Federal Constitutional Court’s decision on the climate fund as more serious than previously assumed. According to information from the Portal news agency, on Monday the Ministry of Finance extended the budget freeze imposed on the Climate and Transformation Fund (KTF) to almost the entire federal budget. This emerges from a letter from the State Secretary for the Budget, Werner Gatzer, which was made available to Portal in the evening.

When questioned on Monday evening, the Ministry of Finance said commitment authorizations in the current budget would be suspended to avoid past charges for future years. “Existing obligations will continue to be fulfilled, but new ones cannot be contracted”, he emphasized.

Elsewhere in government it was also clear that Finance Minister Christian Lindner was not acting alone: ​​“It was agreed and it makes sense”.

The entire budget must be verified

Gatzer’s letter states: “In order to avoid greater burdens for future financial years, I therefore intend to block with immediate effect all commitment authorizations that are still available under individual plans 04 to 17 and 23 to 60 of the 2023 federal budget ”. Gatzer points to paragraph 41 of the Federal Budget Code, which regulates budget freezing. The individual budgets of all ministries are affected by the individual plans mentioned. Individual plan 60 includes the climate and transformation fund and the €200 billion defense umbrella to reduce energy prices. According to the list, constitutional bodies such as the Federal President, the Bundestag, the Bundesrat and the Federal Constitutional Court are excluded.

The Federal Constitutional Court canceled 60 billion euros from the German federal government on Wednesday because the transfer of unused Corona loans to the climate fund was unconstitutional. The government now has no money. There is also further clarification from the court regarding 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 budget for 2024. On the day the verdict was announced, the Minister of Finance Lindner ordered a budget freeze only for the climate fund.

As a result of the decision, “the federal budget needs to review the overall financial situation,” Gatzer writes. After the budget freeze, I can, at best, extend the prospect of a release from commitment authorizations (…) requested by ministries in special individual cases, in case of need that cannot be denied in terms of fact and of time. “A particularly rigorous standard is applied to prove such need.” (APA)