Corona: Court of Auditors warns of long-term debt

Schleswig-Holstein’s audit office warns of future-endangering debt in the Corona crisis. If the state parliament approves further loans of 5.7 billion euros on Thursday, as expected, the total amount will rise to a huge 6.7 billion euros in response to the corona crisis, said President Gaby Schäfer of the German Press Agency. This means that the north is one of the top three countries in terms of new debt in the wake of the pandemic in terms of population, economic power and budget volume. Priorities are required. “Schleswig-Holstein has to face the facts and adjust its expenditures in the next few years to the lower tax revenues.” For 2020, the Court of Auditors understands that the high expenditure and shortfalls in income cannot be saved in the current budget. Schäfer questioned whether the pandemic-related loans for the coming years, for example for daycare centers, cycle paths, digitization or climate protection, are actually corona-related. As the highest state authority, the audit office exercises financial supervision over the state government, the ministries and all state operations.

Schäfer also criticized the intention of the Jamaica coalition to finance the modernization of the infrastructure with 2.5 billion euros of new debt over a period of ten years. “That goes too far because it overstrains the debt brake rule.” In September, the federal and state audit offices unanimously called for emergency loans to be taken out in the respective budget year only in the amount in which they are actually needed to cope with the crisis. In addition, it should be demonstrated year after year that new borrowing is really caused by the pandemic. From Schäfer’s point of view, the state could have drawn up a two-year budget for 2021 and 2022 in order to be able to justify a specific reference to an emergency for this period. She also asked about the country’s consolidation efforts, i.e. about its willingness to adjust spending to the shrinking income caused by the crisis. With the planned record level of debt, future generations of politicians would hardly have any room for maneuver, said the President of the Audit Office. It is the task of the government and the state parliament to set priorities. You would have to be critical of the expenditure, especially when it comes to staff. The fact that around 13,000 employees will retire by 2030 is a historic opportunity. One cannot consistently say that staff cannot be cut anywhere. “If everything is equally important, the necessary priorities will not be set,” said Schäfer. The state parliament is to pass the fourth supplementary budget for this year on Wednesday. On the one hand, an increase in the credit authorization by 1.2 billion euros is planned. In addition, an emergency loan totaling 4.5 billion euros is planned. Jamaica had reached an agreement on this with the opposition factions of the SPD and SSW. This requires a two-thirds majority in parliament. The state parliament had already decided on an emergency loan of one billion euros in the spring. According to current plans, the country’s mountain of debt will grow from 29 billion euros in the previous year to 38 billion euros by 2024.

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