State Auditor Criticizes Black-Green Budget Plans - Schleswig-Holstein’s €1.3 Billion Budget Crisis Sparks Fiscal Alarm
The state government of Schleswig-Holstein, led by Minister President Daniel Günther, faces a grim financial outlook. The Court of Auditors, under outgoing President Gaby Schäfer, has criticized the 2026 draft budget for lacking substantial spending cuts, revealing a financing gap of €921 million, with the shortfall calculated at €1.3 billion.
The recent positive October tax revenue forecast does little to alleviate the situation, as it would barely reduce the deficit. Even with planned savings, average annual funding gaps of around €400 million are expected to persist. The coalition has failed to deliver on its pledge to present both an investment-driven and austerity-focused budget.
The state government plans to plug the budget gap primarily by withdrawing €300 million from the pension fund and dissolving reserves. However, the government must refrain from taking out the planned cyclical credit lines. The government intends to use its entire new borrowing capacity of €520 million exclusively for investments, but this does not represent additional finance. An average annual shortfall of nearly €1 billion is projected for the coming years, with financing gaps surging from €1 billion in 2027 to €1.7 billion by 2032.
The black-green state government in Schleswig-Holstein faces a significant financial challenge, with the Court of Auditors criticizing its budget savings deficiencies. Despite plans to withdraw funds from the pension fund and use new borrowing capacity for investments, the government must address the projected financing gaps to ensure the state's fiscal sustainability.
