Budget Woes Hit Defense Ministry Hard
Troubles for the German government's finances are hitting Boris Pistorius' (63, SPD) Ministry of Defense harder than expected.
A payment halt–applying not just to the regular defense budget, but also to the special assets of the troops–is in effect, according to a ministry letter obtained by the "Augsburger Allgemeine" (Thursday). The letter explains that all remaining commitment appropriations from the 2023 federal budget and also from the 2023 business plan of the Bundeswehr Special Fund are blocked until further notice, to avoid future financial-year charges.
Existing obligations, however, remain exempt from the freeze.
Impact on Special Assets
The Bundeswehr's special assets have thus far remained unaffected by the Karlsruhe-orchestrated financial policy distortions. These special assets gained constitutional status following Russia's incursion into Ukraine.
Budget Meetings Canceled
In light of this new legal situation, the "traffic light coalition" decided to postpone the second meeting aimed at finalizing the 2024 budget. Originally scheduled for Thursday, this meeting will no longer take place.
CDU Chief Budget Officer Christian Haase welcomed the government's decision, praising their compliance with the CDU/CSU's demand for an emergency brake during the budgetary proceedings.
"Finally, common sense prevailed in the 'traffic light' coalition," Haase told the Augsburger Allgemeine newspaper. "This was absolutely necessary in the current budget crisis."
- The 'traffic light coalition'–comprising the 'FDP', 'SPD', and 'The Greens'–has canceled a meeting to finalize the 2024 budget.
- The Bundeswehr's special assets have not been affected by the financial policy fallout resulting from the Karlsruhe ruling.
- Commitment appropriations from the 2023 federal budget and the 2023 business plan of the Bundeswehr Special Fund have been frozen due to a payment halt and a court ruling.
Enrichment Insights
The German government's decision to block commitment appropriations is primarily attributed to the German Federal Constitutional Court's ruling on the Second Supplementary Budget Act 2021. This ruling annulled the Second Supplementary Budget Act 2021, invalidating the €60 billion credit authorization intended for the "Energy and Climate Fund" and other special funds.
This decision has far-reaching consequences for the Bundeswehr Special Fund and Germany's overall defense budget, impacting financing, meeting defense commitments, and changing fiscal policy requirements.
[1] Source: Various reports and expert analysis. [2] Source: [3] Source:
