The Federal Minister of Finance sees the federal government in an imbalance. That’s why Christian Lindner now wants to mess with the prime ministers. His goal: more money should remain in the federal budget and less go to the states.
“Without strengthening responsibility for costs, the federal government will not be able to fulfill its tasks” – the sentence can be found in a guest article by the finance minister in the “Frankfurter Allgemeine”, in which he outlined his initiative for more personal responsibility at state levels at the end of last week . “Clear responsibilities and more transparency in public finances increase their effectiveness and acceptance,” the FDP leader continued.
The background to the indirect letter to the state leaders via the press is clear: Federal finances are strained, the pandemic, the Ukraine war and now the relief packages are eating up a lot of money and will continue to do so. At the same time, Lindner wants to comply with the debt brake again from 2023, an agreement in the coalition agreement about which at least parts of the SPD and the Greens now have considerable doubts.
The Free Democrats hardly play a role in the governments at the state level – seen in this way, Lindner hardly steps on the toes of a party member who might consider more federal funds here or there to be right. But the coalition partners in the federal government are significantly more powerful at the state level. Eight governments are led by the SPD, one by the Greens. And the Prime Ministers of the Union are not considered to be fundamentally opposed to federal funds for their budgets.
On Sunday, the traffic light coalition announced that it would contribute 1.5 billion euros to a follow-up regulation for the nine-euro ticket – if the federal states add this sum themselves. The massively reduced ticket, which was valid from June to August, was an idea of the Greens and was only subsidized by the federal government. The costs for this amount to at least three billion euros. Seen over a year, it would be twelve billion euros. A permanently introduced ticket for 49 to 69 euros per month (this price range was named by the traffic light coalition on Sunday) is correspondingly less expensive for the state.
After all, Lindner can call on the Union countries to help when it comes to complying with the debt brake. But especially in the CDU, there have also been easing exercises with a view to this in recent years – and no “black” head of state will put up with less money from Berlin just because the FDP leader wants to comply with the debt brake at all costs.
On the other hand, Lindner can actually cite an “imbalance” that is at the expense of the federal government: In the first half of 2022, the federal government continued to record a deficit of almost 43 billion euros in the budget. The federal states, on the other hand, reported a total increase of almost 17 billion euros. That is why Lindner wants to step on the brakes in the future: with mixed financing, with federal programs for start-up financing of projects, with the sole assumption of the burden by the federal government in crisis situations.
The finance minister receives support from the Federal Court of Auditors. He has just sent the budget committee of the Bundestag an analysis of the state of federal finances, which is available to the Tagesspiegel. The budget controllers state that the federal government has a high debt burden, not least because of the ancillary budgets such as the climate and transformation fund or the special fund for the Bundeswehr. In view of the growing risks from the foreseeable increase in interest payments, the Court of Auditors is of the opinion that the federal government must “again take more account of its own financial situation in relation to the federal states”. The paper states: “The federal government uses its debt to finance the balanced state budgets.”
According to the report by the Court of Auditors, the federal government still accounted for 43.3 percent of total tax revenue in 2011. In 2019 it was still 41.2 percent, but due to the pandemic-related temporary sales tax reduction, which the federal government alone shouldered, the proportion then fell to 37.7 percent in 2021. From 2023 it should be about 39 percent.
The budget controllers in Bonn identified the significantly lower proportion of sales tax as the most important reason for the “erosion of the tax financing basis of the federal budget”. From 2021 to date, this has fallen from almost 54 to 43 percent. Compared to the federal share in 2011 (43.3 percent), the period 2022 to 2026 was short by 202 billion euros. The funds flowed, for example, for universities and schools, accommodation and heating costs, urban development funding, digital. The Federal Court of Auditors demands that the federal states “must be held accountable” for further measures to be taken because of the energy crisis.