After the Federal Constitutional Court's verdict on the reallocation of federal funds, Bavaria's Finance Minister Albert Füracker (CSU) has urged the federal government to uphold its financial commitments to the federal states and municipalities. In an interview with the Augsburger Allgemeine newspaper, Füracker expressed firm opposition to any plans for budget cuts at the state level, claiming that states and municipalities shouldn't be penalized for the ideology-driven financial policies of the traffic light government.
In Füracker's view, the government's unconstitutional budget preparation was solely its own fault. He urged the coalition to quickly clarify which projects would be affected by the ruling and outline plans for replacing lost funds. The CSU politician cautioned against pursuing a secretive budget policy, warning of potential consequences.
On Wednesday, the Federal Constitutional Court ruled that using coronavirus loans for climate projects was unconstitutional. The decision creates a 60 billion euro gap in climate project financing.
Following the court's ruling, Federal Chancellor Olaf Scholz (SPD) and Finance Minister Christian Lindner (FDP) acknowledged its potential impact on budgetary practices at both federal and state levels.
In light of the judgment, states and municipalities should avoid penalties due to the federal government's altered financial policy regarding climate projects. The government must clarify the projects affected by the court's verdict and propose appropriate replacement funding, avoiding a clandestine budget approach.
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In response to the Federal Constitutional Court's ruling on the Second Supplementary Budget Act 2021, the government and states like Saxony-Anhalt are making adjustments to their financial policies. The court declared the Act unconstitutional due to its provision allowing for budgetary reserves using emergency credit authorizations without linking these to specific yearly spending.
To comply with the ruling, Saxony-Anhalt must declare a continued emergency budgetary situation and implement annual credit authorizations to fund the special Covid-19 fund, without increasing borrowing. This approach ensures that the special fund's total envelope remains at €2 billion.
States and municipalities must also ensure that emergency credit authorizations are linked to specific yearly spending to maintain transparency and avoid penalties for non-compliance. Long-term sustainability measures such as the Federal Climate Change Act and the Bundeswehr's transformation to a climate-neutral army by 2045 also contribute to meeting constitutional requirements.
