The federal budget for 2021 is in place. In a long night session, the housekeepers in the Bundestag fought their way through the jumble of numbers that make up a budget until Friday morning around five o’clock. It was a historic session. He has never seen such changes in the original draft, said the head budget of the Union parliamentary group, Eckhardt Rehberg, who has been in parliament for 15 years.
Indeed: The fact that a government is pushing an increase in new debt by almost 20 billion euros into the so-called adjustment meeting of the budget committee is unusual – and shows the uncertainty that exists due to the further consequences of the corona crisis for the next year.
A few days ago there was talk of around 160 billion euros in new loans, which was significantly more than in the government draft from September. There was a new debt of 96 billion euros. Now it is 179.8 billion euros. How did that happen?
More for almost all departments
The answer can be found, on the one hand, in income – one continues to expect a significant tax shortfall in the coming year due to the crisis. On the other hand, however, in spending planning. All departments get a little more money, except for those for the environment and economic cooperation. The coalition was also able to cut the federal debt somewhat – because interest rates are still lower than assumed in the planning.
Health Minister Jens Spahn (CDU), on the other hand, recorded a high plus. He can count on eleven billion euros more, especially for additional spending due to the corona crisis, for example for FFP2 masks and vaccines. And Transport Minister Andreas Scheuer (CSU) will be injected a good seven billion more, most of it for a capital increase for Bahn AG. The funds for corona corporate aid were increased again – by two billion to 39.5 billion euros.
A lush blank title
But the largest item that is covered by new loans is a blank title: The coalition is putting together 35 billion euros as a kind of precaution should the epidemic in 2021 turn out to be worse than expected and cause more costs.
That impaled the opposition. “Election campaign budget” – this is how the Left Gesine Lötzsch called the figures. The FDP politician Otto Fricke spoke of a “free ticket” with a view to the “global additional expenditure”, as the freely available 35 billion euros are called in housekeeping German. The Green Sven-Christian Kindler has doubts that Federal Finance Minister Olaf Scholz (SPD) will still manage his financial planning. AfD MP Peter Boehringer said that only the end of the lockdown could “save this country in budgetary terms”.
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How the money will be distributed in the coming year and whether that much will actually be needed is unclear. But in this way the coalition has given itself a lot of leeway in the night action. The reason: The Union and the SPD want to avoid having to submit a billions in supplementary budget in a few months.
A mortgage of 400 billion euros
However, it is clear that the two federal corona budgets will be a powerful mortgage for future governments this year and next. If you add up the target estimates for 2020 (around 218 billion euros) and 2021 (just under 180 billion), the result is a planned new debt of almost 400 billion euros. This is only possible because the emergency regulation of the debt brake can be used.
But it is also part of the debt regulation in the Basic Law that a substantial part of this sum must be repaid. This means that from 2023 onwards, a few billion euros will actually appear as expenditure items in every budget. So far, debts have practically not been repaid, but instead repeatedly redeemed with new bonds, i.e. virtually perpetuated.
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But how high will this debt burden be, which will actually have to be resolved in the budget? That depends above all on whether the credit authorizations have to be used in full this year and next. If it remained at the target total of 400 billion euros, it would be around 120 billion euros to be repaid by 2020. And in the budget that has just been approved, there are 164 billion euros. The more than 280 billion euros go beyond what the debt brake allows in the event of an economic downturn like 2020 and the following years without an emergency regulation.
How does the “is” turn out?
How the “is” in the budget will turn out, however, is not known. The Federal Audit Office assumes, however, that the 2020 target will actually be “50 or even more billion euros” below. This is due to the fact that Finance Minister Scholz in his supplementary budgets from March and June, as a precaution, estimated significantly more loan authorizations than he now apparently needs. It can be assumed that “only” 160 billion euros actually had to be raised on the capital market at the end of the year. Then around 60 billion would have to be repaid from 2023, stretched over 20 years (that has already been decided) that would be three billion euros per year.
The repayment of the new debt planned for 2021 has so far amounted to ten billion euros per year from 2026. From this year on, a government would have to plan around 13 billion euros per year for repaying the corona debts.
Half of an annual Berlin budget
In comparison: the Federal Minister for Family Affairs currently receives this much per year for her budget. You could use it to finance the bloated Bundestag for thirteen years. Or for a good two years at the Foreign Office with the entire German diplomatic service. And another comparison: the sum corresponds roughly to the state budget of Schleswig-Holstein or almost half of the budget of the federal capital Berlin.
It is unclear where the money for the repayment installments will come from – the financial planning will only last until 2024. The evaluation of the Federal Audit Office on Friday was unusually juicy. The increase in the federal debt by almost a third in two years is a “one-time process”. Not everything about the budget is understandable. “An effort to limit borrowing to the emergency-indicated level is not discernible,” the statement said. Budget reserves would not be used. In fact, the government is sitting on a reserve of 48 billion euros. But it is already needed to plug holes in the next budget.
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