How the traffic light curves through budgetary law

Tue 26th Apr, 2022

Photo by Chuanchai PundejChancellor Olaf Scholz (SPD) claims to have always thought through his decisions and statements and to formulate them very precisely. But sometimes things have to happen quickly. Like last week, when the chancellor announced that the government would increase the budget for military aid to other states - from 0.2 to two billion euros.

The larger part is to go to Ukraine. This was the head of government's response to growing pressure to meet Kiev's requests for arms aid. With the money from Berlin, Ukraine is to be able to buy weapons itself, in Germany or elsewhere. Finance Minister Christian Lindner (FDP) added that the funds would be quickly included in the supplementary budget to be approved by the cabinet on April 27. That sounded like a well-prepared rush job.

But this budget still has to pass through the Bundestag and Bundesrat. CDU foreign policy expert Norbert Röttgen and other critics therefore pointed out that the money would probably not actually be available before the middle or end of June. Not well prepared, then?

Now Lindner has reacted: On the sidelines of the G20 meeting in Washington, he said, according to Editorial Network Germany, that as soon as there was a draft ready for a decision on the weapons requests, the funds could also flow earlier as unbudgeted expenditure.

Scholz's announcement referred to the so-called training initiative, a special pot at the Ministry of Defense that supports crisis prevention and crisis management measures in other countries.

Since this pot already exists according to plan, strictly speaking an unbudgeted expenditure of funds would not be possible - but an overbudgeted one (because an existing budget item is being increased). But presumably the federal government, which is operating without a regular budget for 2022 and is therefore in provisional budget management, is not currently bothered by such subtleties.

The fact that the budgetary regulations require that such an increase be compensated for by savings elsewhere in the defense budget is not likely to play a major role in view of the rush.

The Ministry of Finance points out that even after the supplementary budget has been approved by the Cabinet and before it becomes law, it is possible to make funds available at short notice for the benefit of Ukraine. Lindner, however, can agree to advance spending of funds - whether unbudgeted or overbudgeted - only "in the case of unforeseen or unavoidable needs," according to the Federal Budget Code.

The procedure for allocating funds in the upgrading initiative is also regulated. Following a request for support from the partner country, a project outline is drawn up, followed by coordination between the defense ministry and the Foreign Office. If the project is approved, the partner country can invite bids, after which the upgrading funds can flow.

As it stands, the Russian incursion and the course of the war in Ukraine pose a real challenge to German budgetary law and the regularity of the upgrading initiative. From Kyiv's point of view, this seems to mean that the matter will last one way or another - whether via supplementary budget or unbudgeted/excess expenditure.

Photo by Chuanchai Pundej


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