Abstract
The introduction of the constitutional “debt brake” within the German Basic Law in 2009, ended a long-standing tradition that allowed state indebtedness as long as investments were made to the equivalent amount. As this old “golden rule of financial policy” had been misused for decades, a strong majority both in the Bundestag (the Parliament) and in the Bundesrat (the second chamber) voted in favor of a provision according to which “the budgets of the Federation and the Länder shall in principle be balanced without revenue from credits”. The analysis begins by clarifying that the Federation, the individual Länder and also the municipalities enjoy constitutionally guaranteed budgetary autonomy. Next, an overview of the objects and procedures of budgetary planning follows, which includes an explanation of the formal requirements for incurring debt. After that, the author analyzes in detail the limits to borrowing. There are three exceptions to the principle that indebtedness is prohibited. First, the Federation – unlike the States – is afforded a “structural” indebtedness when revenue obtained from borrowing does not exceed 0.35 % of the nominal GDP. Second, under “abnormal” economic conditions, both the Federation and the Länder may finance fiscal stimulus through the financial market (but have to reduce indebtedness or create surpluses in cyclical upturns). Third, the Basic Law permits the Federation and the States to borrow in case of “natural catastrophes” and “other unusual emergency situations”. These rules do not apply to the municipalities. Separate law restricts their borrowing. Finally, the author discusses the shortcomings of the new “debt brakes” and the risk that the restrictive regulations will be circumvented in practice.
An earlier version of this national report was previously published in: Schmidt-Kessel (editor on behalf of the German Gesellschaft für Rechtsvergleichung), German National Reports on the 19th International Congress of Comparative Law 2014, Mohr Siebeck Verlag, 2014, pp. 239–260.
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Notes
- 1.
Cf. David Ricardo, Funding System (1820), in: Sraffa (ed.), The Works and Correspondence of David Ricardo, vol. 4, 1951, p. 149, 197; James Buchanan/Richard Wagner, Democracy in Deficit – The Political Legacy of Lord Keynes, 1977. For empirical studies see Alberto Alesina/Guido Tabellini, A Positive Theory of Fiscal Deficits, Review of Economic Studies 57 (1990), p. 403 ff.; Robert J. Franzese, The Positive Political Economy of Public Debt – An Empirical Examination of the OECD Postwar Experience, 1998; Torsten Persson/Guido Tabellini, Political Economics – Explaining Economic Policy, 2000.
- 2.
To the historical background of the German state indebtedness law Hermann Pünder, in: Friauf/Höfling (eds.), Berliner Kommentar zum Grundgesetz, vol. 4, Art. 115 notes 6 ff. (2010).
- 3.
See e.g. Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung, Staatsverschuldung wirksam begrenzen, 2007, p. 31 f., 49 ff., 74 ff. For more details Ben J. Hejdra/Lex Meijdam, Public Investment and Intergenerational Distribution, Journal of Economic Dynamics & Control 26 (2002), p. 707 ff.
- 4.
Richard Abel Musgrave, The Theory of Public Finance – A Study in Public Economy, 1959. For a different opinion Abba P. Lerner, The Burden of the National Debt (1948), in: Ferguson (ed.), Public Debt and Future Generations, 1964, p. 16, 17 (“We owe it to ourselves”). Against that view James M. Buchanan, Public Principles of Public Debt, 1958; Viktor Vanberg/James M. Buchanan, Organization Theory and Fiscal Economics – Society State and Public Debt, Journal of Law, Economics and Organization 2 (1986), p. 215 ff. For the philosophical background see Hermann Pünder, Staatsverschuldung, in: Isensee/Kirchhof (eds.), Handbuch des Staatsrechts der Bundesrepublik Deutschland, vol. 5, 3rd ed. 2007, § 123 notes 3 ff. (with further references).
- 5.
See for the Federation Art. 115 I 2 of Basic Law (1969–2009): “Revenue obtained by borrowing may not exceed the total expenditures for investments provided for in the budget; exceptions are permissible only to avert a disturbance of the overall economic equilibrium.” The constitutions of the States have been similar. For details to the reform Pünder (note 2), Art. 115 notes 14 ff.
- 6.
John Maynard Keynes, The General Theory of Employment, Interest and Money, 1936.
- 7.
Josef Isensee, Schuldenbarriere für Legislative und Exekutive – Zu Reichweite und Inhalt der Kreditkautelen des Grundgesetzes, in: Festschrift für Karl Heinrich Friauf, 1996, p. 705, 708.
- 8.
See Udo Di Fabio/Rudolf Mellinghoff, Sondervotum, BVerfGE 119, p. 96, 171 (“wiederkehrende Dauerrechtsverletzung”). For details Pünder (note 4), § 123 notes 11 ff.
- 9.
For details Pünder (note 2), Art. 115 notes 15 ff., 38 ff., 95 ff.
- 10.
End of 2008 – shortly before the constitutional change was realized – the explicit debt of all public budgets was 1,52 trillion Euro. Cf. Statistisches Bundesamt, Pressemitteilung Nr. 60 v. 20.02.2009. End of 2012 the sum was 2,07 trillion Euro. Cf. Statistisches Bundesamt, Pressemitteilung Nr. 112 v. 22.03.2013.
- 11.
David Hume, Essay on Public Credit, 1752, p. 3 f.
- 12.
In 2012 all Member States of the European Union had debt of 12,90 trillion Euro. Cf. Eurostat, Pressemitteilung Nr. 64 v. 22.04.2013.
- 13.
For details Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung (note 3), p. 24 ff.
- 14.
Cf. Frank Bodmer, The Swiss Debt Brake: How it works and What Can Go Wrong, Schweizerische Zeitschrift für Volkswirtschaft und Statistik 142 (2006), p. 307 ff.
- 15.
Kommission von Bundestag und Bundesrat zur Modernisierung der Bund-Länder-Finanzbeziehungen, Decisions of March 5th 2009, Kommissionsdrucksache 174, p. 41. For details Pünder (note 2), Art. 115 notes 59 ff.; Hermann Pünder, in: Kube et al. (eds.), Leitgedanken des Rechts, Festschrift für Paul Kirchhof, vol. 2, 2013, p. 1519 ff.
- 16.
Cf. Pünder (note 2), Art. 115 notes 34 ff. For details Philipp Raidt, Die wirtschaftspolitischen Vorgaben der Wirtschafts- und Währungsunion – Eine Analyse der Regelungsmechanismen und des Reformbedarfs, 2008.
- 17.
Art. 2 Excessive Deficit Protocol states: “In Article 126 of the said Treaty and in this Protocol: “government” means general government, that is central government, regional or local government and social security funds, to the exclusion of commercial operations, as defined in the European System of Integrated Economic Accounts; (…)”.
- 18.
Treaty on Stability, Coordination and Governance in the Economic and Monetary Union of 02.03.2012. All Member States of the European Union are Member States of that Treaty, except the Czech Republic and the United Kingdom.
- 19.
Cf. to the constitutional problems in transferring these rules into German law BVerfGE 132, p. 195, 278 ff.; Ludger Schlief/Bernd Schulte, Anmerkungen zur innerstaatlichen Umsetzung des Fiskalvertrages, ZG 2013, p. 121 ff.; Christian Calliess/Christopher Schoenfleisch, Auf dem Weg in die europäische “Fiskalunion”? – Europa- und verfassungsrechtliche Fragen einer Reform der Wirtschafts- und Währungsunion im Kontext des Fiskalvertrages, JZ 2012, p. 477 ff.; Christoph Möllers/Jörn Reinhardt, Verfassungsrechtliche Probleme bei der Umsetzung des Europäischen Fiskalvertrages, JZ 2012, p. 693 ff.; Albrecht Weber, Die Europäische Union auf dem Wege zur Fiskalunion?, DVBl 2012, p. 801 ff.
- 20.
Cf. BVerfGE 1, p. 14, 34; 36, p. 342, 360 f.; 72, p. 330, 383, 388; 116, p. 327, 379. From an academic perspective Josef Isensee, Idee und Gestalt des Föderalismus im Grundgesetz, in: Isensee/Kirchhof (eds.), Handbuch des Staatsrechts der Bundesrepublik Deutschland, vol. 6, 3rd ed. 2008, § 126 note 65; Christoph Möllers, Staat als Argument, 2000, p. 350 ff.
- 21.
Cf. BVerfGE 8, p. 122, 132; 39, p. 96, 109; 86, p. 148, 215, 218 f.; and Horst Dreier, in: Dreier (ed.), Grundgesetz, vol. 2, 2nd ed. 2006, Art. 28 note 95; Veith Mehde, in: Maunz/Dürig, Grundgesetz, vol. 4, Art. 28 II note 11 (2012). See also Art. 106 IX Basic Law.
- 22.
The autonomy of the municipalities has its roots in the villages of Germanic tribes and in the municipal variety of the “Holy Roman Empire of the German Nation”. The modern form of the right to self-government dates back to the Prussian City Charter of 19.11.1808. Cf. for details Thomas Mann/Günter Püttner, Handbuch der kommunalen Wissenschaft und Praxis, vol. 1, 3rd ed. 2007, §§ 4–8.
- 23.
BVerfGE 26, p. 228, 244; 71, p. 26.
- 24.
Cf. Johannes Pinkl, Umgehungsgefahren für die neue “Schuldenbremse”, in: Hetschko/Pinkl/Pünder/Thye (eds.), Staatsverschuldung in Deutschland nach der Föderalismusreform II – eine Zwischenbilanz, 2012, p. 103, 126 ff.
- 25.
Cf. Hermann Pünder, Haushaltsrecht im Umbruch – eine Untersuchung am Beispiel der Kommunalverwaltung, 2003. For the budgetary law of the States see Dieter Engels/Manfred Eibelshäuser, Kommentar zum Haushaltsrecht des Bundes und der Länder, 2013; Antonius Westermeier/Herbert Wiesner, Das staatliche Haushalts-, Kassen und Rechnungswesen, 9th ed. 2012; Marc Gnädinger, Modernisierung der Haushaltswirtschaft in Bund und Ländern, 2009.
- 26.
See also § 11 II Bundeshaushaltsordnung (BHO, Federal Budget Code). With special regard to the budgetary law of the municipalities Pünder (note 25), p. 68 ff. It is important to note that this “cameralistic” view is more and more criticized. See for details Hermann Pünder, in: Friauf/Höfling (eds.), Berliner Kommentar zum Grundgesetz, vol. 4, Art. 110 notes 143 ff. (2008); Marc Gnädinger/Dennis Hilgers, Deutsche Schuldenbremse(n) – Etablierte Modelle und ökonomisch begründeter Fortentwicklungsbedarf, ZögU 2010, p. 181 ff.; Birgit Frischmuth, Gesamtreform des öffentlichen Haushaltsrechts ist geboten, ZKF 2008, p. 49 ff.; Christian Magin, Die Wirkungslosigkeit der neuen Schuldenbremse, Wirtschaftsdienst 2010, p. 262, 267 f.; Dietrich Budäus/Dennis Hilgers, Neues doppisches Haushalts- und Rechnungswesen als Grundlage öffentlicher Ressourcensteuerung, BFuP 2010, p. 501 ff.
- 27.
Cf. Pünder (note 26), Art. 110 notes 21 ff.
- 28.
See also § 15 I 1 BHO.
- 29.
To exceptions Pünder (note 26), Art. 110 notes 30–36. With special regard to the law of the municipalities Pünder (note 25), p. 197 ff.
- 30.
See also § 26 I 3, II 1 BHO.
- 31.
Critically Pünder (note 4), § 123 note 77.
- 32.
See § 26 I 2, II 2 BHO.
- 33.
Cf. Thomas Puhl, Budgetflucht und Haushaltsverfassung, 1996, p. 497 ff., 499 ff.; Larissa Maier-Bledjian, Sondervermögen des Bundes, 2011, p. 153 ff., 166.
- 34.
Pünder (note 25), p. 229 f.
- 35.
Cf. § 15 I 2 BHO.
- 36.
See § 13 IV no. 3 BHO.
- 37.
See to the discussion Pinkl (note 24), p. 121 ff.
- 38.
See Pünder (note 26), Art. 110 note 31.
- 39.
Generally Michael Kilian, Nebenhaushalte des Bundes, 1993, p. 721; Puhl (note 33), p. 506.
- 40.
See at 5.4.1–5.4.2.
- 41.
Kilian (note 39), p. 849 f.
- 42.
See also Art. 143b I 1 Basic Law: “The special property Deutsche Bundespost will be transformed into private law businesses according to a federal statute.”
- 43.
See also § 29 I SGB IV, § 367 I SGB III.
- 44.
Cf. § 67 I SGB IV. See also Ferdinand Kirchhof, Finanzierung der Sozialversicherung, in: Isensee/Kirchhof (eds.), Handbuch des Staatsrechts der Bundesrepublik Deutschland, vol. 5, 3rd 2007, § 125 notes 6 f.
- 45.
Cf. F. Kirchhof (note 44), § 125 notes 22 ff.
- 46.
Cf. for the unemployment insurance §§ 364 f. SGB III and for the pension insurance § 214 SGB VI. From a constitutional perspective Art. 120 I 4 Basic Law: “The Federation pays the subsidies towards the burdens of social insurance institutions, including unemployment insurance and public assistance to the unemployed.” See also Puhl (note 33), p. 366; F. Kirchhof (note 44), § 125 notes 6 f., 48 ff.
- 47.
See Puhl (note 33), p. 535 f.; Kilian (note 39), p. 690, 721. For details Stephan Rixen, Auf dem Marsch in den verschuldeten Krankenversicherungsstaat?, VSSR 2004, p. 241, 260 ff.
- 48.
For a comparative perspective Pünder (note 26), Art. 110 notes 17 ff.
- 49.
Similarly § 1 s. 1 BHO.
- 50.
Cf. Pünder (note 25), p. 88 ff.
- 51.
See Pünder (note 25), p. 94 ff.
- 52.
See BVerfGE 45, p. 1, 46; 70, p. 324, 357, 361. See also § 29 I BHO and § 10 I BHO.
- 53.
Pünder (note 26), Art. 110 note 72.
- 54.
BVerfGE 45, p. 1, 46 f.
- 55.
Cf. Pünder (note 25), p. 92 ff.
- 56.
§ 28 I BHO.
- 57.
Christian Kastrop et al., Konzept und Herausforderungen der Schuldenbremse, APuZ 13/2012, p. 16, 21; Pünder (note 4), § 123 note 87 (with further references).
- 58.
§ 29 I BHO. See also § 28 II BHO. To the municipalities Pünder (note 25), p. 94.
- 59.
See § 30 BHO.
- 60.
See the general rule in Art. 76 II 2 Basic Law.
- 61.
Cf. § 78 Geschäftsordnung des Deutschen Bundestages (GOBT, Rules of Procedure of the German Bundestag).
- 62.
Cf. § 79 s. 3 GOBT.
- 63.
§ 80 I, § 95 I 2 GOBT.
- 64.
§ 81 I GOBT.
- 65.
§ 82 I GOBT.
- 66.
§ 85 I 1 GOBT.
- 67.
§ 85 I 2 GOBT.
- 68.
Ekkehard Moeser, Die Beteiligung des Bundestages an der staatlichen Haushaltsgewalt, 1978, p. 143 ff.
- 69.
For details Pünder (note 26), Art. 110 notes 81 f.
- 70.
See below at 5.4.1–5.4.3.I.
- 71.
See Hermann Pünder, Generationengerechtigkeit in der öffentlichen Finanzwirtschaft: Maßnahmen zur Begrenzung und zum Abbau der Staatsverschuldung, in: Henneke (ed.), Kommunen in den Föderalis musreformen I und II, 2008, p. 69, 86 ff.
- 72.
Cf. BVerfGE 70, p. 324, 361 f.
- 73.
See § 1 s. 2 BHO.
- 74.
See § 13 IV BHO.
- 75.
BVerfGE 45, p. 1, 33.
- 76.
See e.g. Christian Hillgruber, in: von Mangoldt/Klein/Starck, Grundgesetz, vol. 3, 6th ed. 2010, Art. 110 note 80; Werner Heun, in: Dreier (ed.), Grundgesetz, vol. 3, 2nd ed. 2008, Art. 110 note 27.
- 77.
Cf. Pünder (note 26), Art. 110 note 63; Helmut Siekmann, in: Sachs (ed.), Grundgesetz, 6th ed. 2011, Art. 110 note 59.
- 78.
See BVerfGE 45, p. 1, 32 ff.
- 79.
Act on the Implementation of Article 115 of the Basic Law (“Article 115 Act”), Federal Law Gazette 2009 I, p. 2702, 2704. The act is based on the authorization in Art. 115 II 5 Basic Law.
- 80.
See Art. 143d I 5 Basic Law.
- 81.
See Art. 143d I 3 and 4 Basic Law; and Christoph Bravidor, Umsetzung der Schuldenbremse in den Ländern, in: Hetschko/Pinkl/Pünder/Thye (eds.), Staatsverschuldung in Deutschland nach der Föderalismusreform II, , p. 11, 26 ff.
- 82.
See Hanno Kube, Financing the State – The Tax-funded State versus Multiple and Mixed Financing Strategies, in: Pünder/Waldhoff (eds.), Debates in German Public Law, 2014, p. 131 ff.
- 83.
Cf. Hermann Pünder, Staatsverschuldung und Generationengerechtigkeit – Die neue “Schuldenbremse” im Vergleich zum überkommenen Recht, in: Die Professorinnen und Professoren der Bucerius Law School (eds.), Begegnungen im Recht, 2011, p. 275, 285 ff.
- 84.
See § 13 IV no. 2 BHO and § 18 I BHO.
- 85.
For details Pünder (note 2), Art. 115 notes 89 f.
- 86.
Kommission von Bundestag und Bundesrat zur Modernisierung der Bund-Länder-Finanzbeziehungen (note 15), p. 41.
- 87.
Pünder (note 2), Art. 115 notes 25, 76.
- 88.
See for the Federal level Art. 115 I 2 Basic Law in the former version (supra note 5).
- 89.
Cf. Pünder (note 4), § 123 notes 33 ff.; Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung (note 3), p. 73 ff.
- 90.
Kommission von Bundestag und Bundesrat zur Modernisierung der Bund-Länder-Finanzbeziehungen (note 15), p. 39, 41.
- 91.
Cf. Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung (note 3), p. 78 ff., 80 (for the years 1995–2005).
- 92.
Own calculation on the basis of the nominal gross domestic product of 2666,4 billion Euro in 2012 (source: Statistisches Bundesamt).
- 93.
Bundesministerium der Finanzen, Notwendigkeit und Inhalt einer neuen Schuldenregelung im Grundgesetz, Kommissionsdrucksache 096, p. 7.
- 94.
Cf. to the discussion Hanno Kube, in: Maunz/Dürig, Grundgesetz, vol. 7, Art. 109 note 118 with further references (2011).
- 95.
See BVerfGE 129, p. 104 ff.
- 96.
Lorenz von Stein, Lehrbuch der Finanzwissenschaft, 2nd ed. 1871, p. 666.
- 97.
Cf. Franco Modigliani, Long Run Implications of Alternative Fiscal Policies and the Burden of National Debt, Economic Journal 71 (1961), p. 730 ff.; William Vickrey, The Burden of Public Debt – Comment, American Economic Review 51 (1961), p. 132 ff.; Milton Friedman, The Counter-Revolution in Monetary Theory, 1970.
- 98.
Cf. Pünder (note 2), Art. 115 notes 28 f.
- 99.
Cf. Art. 115 I 2 Basic Law in the former version (supra note 5).
- 100.
See Pinkl (note 24), p. 105 ff.; Maxi Koemm, Eine Bremse für die Staatsverschuldung?, 2011, p. 217 ff.
- 101.
For details Pünder (note 2), Art. 115 note 101.
- 102.
Cf. to the “output gap” Arthur M. Okun, Potential GDP: Its Measurement And Significations, Cowles Foundation Paper 190, 1962 (reprint in A. M. Okun, The Political Economy of the Prosperity, 1970); Olivier Jean Blanchard/Danny Quah, The Dynamic Effects of Aggregate Demand and Supply Disturbances, The American Economic Review 79 (1989), p. 655 ff.; Chae-Wan Chung, Utility and Production Functions, 1994; Ray Barrell/James Sefton, Output Gaps – Some evidence from the UK, France and Germany, National Institute Economic Review 151 (1995), p. 65 ff.; Robert J. Hodrick/Edward C. Prescott, Post-War U.S. Business Cycles: An Empirical Investigation, Journal of Money, Credit and Banking 1997, p. 1 ff.; Marianne Baxter/Robert G. King, Measuring Business Cycles: Approximate Band-Pass Filters for Economic Time Series, The Review of Economics and Statistics 81 (1999), p. 575 ff.; Athanasios Orphanides et al., Errors in the Measurement of the Output Gap and the Design of Monetary Policy, Journal of Economics and Business 52 (2000), p. 117 ff.; Athanasios Orphanides, The Quest for Prosperity Without Inflation, Journal of Monetary Economics 50 (2003), p. 633 ff.; Arabinda Basistha/Charles R. Nelson, New Measures of the Output Gap Based on the Forward-Looking New Keynesian Philipps Curve, Journal of Monetary Economics 54 (2007), p. 498 ff.; Tommaso Proietti/Alberto Musso/Thomas Westermann, Estimating Potential Output and the Output Gap for the Euro Area: A Model-Based Production Function Approach, Empirical Economics 2007, p. 85 ff.; Andreas Billmeier, Ghostbusting: Which Output Gap Really Matters?, International Economics and Economic Policy 6 (2009), p. 391, 392.
- 103.
For details Christian Schumacher, Alternative Schätzansätze für das Produktionspotenzial im Euroraum, 2000; Steffen Walther, Berechnungsmethoden des Produktionspotenzials – Darstellung und Kritik, 2007, p. 29 ff.; Billmeier (note 102), p. 391 ff.
- 104.
To the judicial control see Pünder (note 2), Art. 115 notes 159 ff. and below at D. IV.
- 105.
Di Fabio/Mellinghoff (note 8), p. 162.
- 106.
Cf. Christian Kastrop/Martin Snelting, Das Modell des Bundesfinanzministeriums für eine neue Schuldenregel, Wirtschaftsdienst 2008, p. 375, 378 ff.
- 107.
Kommission von Bundestag und Bundesrat zur Modernisierung der Bund-Länder-Finanzbeziehungen (note 15), p. 8. For details Pünder (note 2), Art. 115 notes 99 ff.
- 108.
See Pünder (note 2), Art. 115 notes 113 ff.
- 109.
§ 2 II Article 115 Act: “If an economic trend deviating from the normal conditions is expected for the fiscal year, as a cyclical component, the upper limit on revenues from borrowing to be included in the budget under subsection (1) above shall vary by the amount of those revenues from borrowing or by the amount of budget surpluses which corresponds to the expected effect of the economic trend on the budget.”
- 110.
Kommission von Bundestag und Bundesrat zur Modernisierung der Bund-Länder-Finanzbeziehungen (note 15), p. 8.
- 111.
The legal basis would be Art. 106 I no. 6 Basic Law. See for details Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung (note 3), p. 8, 115; Pünder (note 71), p. 91 f.
- 112.
Cf. Christian Waldhoff/Peter Dieterich, Die Föderalismusreform II – Instrument zur Bewältigung der staatlichen Finanzkrise oder verfassungsrechtliches Placebo?, ZG 2009, p. 97, 116.
- 113.
See Pünder (note 2), Art. 115 notes 137 ff.
- 114.
For details Pünder (note 2), Art. 115 notes 149 ff.
- 115.
See § 6 Article 115 Act.
- 116.
Werner Heun, in: Dreier (ed.), Grundgesetz, vol. 3, 2nd 2008, Art. 115 note 23; Helmut Siekmann, in: Sachs (ed.), Grundgesetz, 5th ed. 2009, Art. 115 notes 52 f.; Rudolf Wendt, in: von Mangoldt/Klein/Starck, Grundgesetz, vol. 3, 5th ed. 2005, Art. 115 notes 46 ff. Critically Pünder (note 4), § 123 notes 41 ff.; Wolfram Höfling, Staatsschuldenrecht, 1993, p. 340 ff.; Josef Isensee, Staatsverschuldung im Haushaltsvollzug, DVBl 1996, p. 173 ff.
- 117.
For details Pünder (note 2), Art. 115 notes 120 ff.
- 118.
See above at D. II. 1. a) and 2.
- 119.
See above at D. II. 3.
- 120.
Own calculation on the basis of the nominal gross domestic product of 2666,4 billion Euro in 2012 (source: Statistisches Bundesamt).
- 121.
For details Pünder (note 83), p. 280 ff.
- 122.
See Pünder (note 2), Art. 115 notes 57 ff.
- 123.
Pünder (note 2), Art. 115 note 161.
- 124.
For details Pünder (note 2), Art. 115 notes 159 f.
- 125.
See Pünder (note 2), Art. 115 note 159.
- 126.
Cf. BVerfGE 123, p. 267, 328ff. (“Judgment on the Treaty of Lisbon”); 129, p. 124, 166 ff. (“Judgment on Greece”); 132, 195, 232 ff. (“Judgment on the European Treaty on Stability, Coordination and Governance in the Economic and Monetary Union”).
- 127.
Cf. Daniel Effer-Uhe, Echter und beratender Sparkommissar im Kommunalrecht der Länder, ZKF 2008, p. 25 ff.
- 128.
To “Reichssparkommissaren” during the Weimar Republic Markus C. Kerber, Der verdrängte Finanznotstand, 2003, p. 390 (with further references).
- 129.
See Koemm (note 100), p. 43 ff.; Walter Pauly/Cornelia Pagel, Bundeszwang in der föderalen Finanzordnung, DÖV 2006, p. 1028, 1029 ff. Different opinion Gabriela Sierck/Matthias Pöhl, Möglichkeiten des Bundeszwangs nach Art. 37 Grundgesetz – Einsetzung eines “Sparkommissars”?, 2006, Wissenschaftliche Dienste des Deutschen Bundestages, WD 3 – 249/06 (“im Einzelfall möglich”); Kerber (note 128), p. 389 ff.; Kerber, Der Souverän des Bundesstaatsnotstands, Der Staat 46 (2007), p. 229, 247 f. In favor of a change of the Basic Law Peter Selmer, Grundsätze der Finanzverfassung des vereinten Deutschlands, Veröffentlichungen der Vereinigung der Deutschen Staatsrechtslehrer 52 (1993), p. 10, 57 f.
- 130.
Cf. BVerfGE 72, p. 330, 386, 397; 86, p. 148, 214; 101, p. 158, 232 f.; 116, p. 327, 380; and Isensee (note 20), § 126 note 156.
- 131.
BVerfGE 116, p. 327 ff.
- 132.
BVerfGE 116, p. 327, 377.
- 133.
For a comparative perspective Pünder (note 2), Art. 115 notes 39 f.
- 134.
See Matthias Rossi, Verschuldungsautonomie und Entschuldungsverantwortung, JZ 2007, p. 394 ff.; Peter Selmer, Der bundesstaatliche Notstand eines Landes – eine ungelöste Verfassungsaufgabe, KritV 2008, p. 171 ff.; Daniel Buscher, Der Bundesstaat in Zeiten der Finanzkrise, 2010, p. 175 ff.
- 135.
For details Pünder (note 25), p. 226 ff.
- 136.
Cf. § 86 I Gemeindeordnung (Municipal Code) of North Rhine-Westphalia , Art. 71 I Gemeindeordnung of Bavaria, § 82 I Gemeindeordnung of Saxony.
- 137.
See above at A.
- 138.
See e.g. § 77 III Gemeindeordnung of North Rhine-Westphalia, Art. 62 III Gemeindeordnung of Bavaria, § 73 IV Gemeindeordnung of Saxony.
- 139.
See also § 7 BHO.
- 140.
For details Pünder (note 83), p. 285 ff.
- 141.
See e.g. § 92 II Gemeindeordnung of Lower Saxony, Art. 71 II 3 Gemeindeordnung of Bavaria, § 82 II Gemeindeordnung of Saxony.
- 142.
Gunnar Schwarting, Kommunales Kreditwesen, 3rd ed. 2006, notes 105 f.
- 143.
See Karolin Herrmann, Der kommunale Kassenkredit im Kontext der Schuldenbremse, in: Hetschko/Pinkl/Pünder/Thye (eds.), Staatsverschuldung in Deutschland nach der Föderalismusreform II – eine Zwischenbilanz, 2012, p. 145 ff.
- 144.
See Pünder (note 25), p. 68 ff.
- 145.
See Pünder (note 25), p. 340 ff.
- 146.
See Jan Stemplewski, Die kommunale Kreditaufnahme in Nordrhein-Westfalen, yet to be published.
- 147.
See e.g. Art. 117 II Gemeindeordnung of Bavaria, § 117 I Gemeindeordnung of Baden-Wuerttemberg, § 143 Gemeindeordnung of Hesse.
- 148.
See for example § 76 I Gemeindeordnung of North Rhine-Westphalia. For details Pünder (note 25), p. 239 ff.
- 149.
See e.g. § 124 Gemeindeordnung of North Rhine-Westphalia.
- 150.
See Dörte Diemert, Das Haushaltssicherungskonzept, 2006, p. 44; Friedrich Heinemann et al., Der kommunale Kassenkredit zwischen Liquiditätssicherung und Missbrauchsgefahr, 2009, p. 49 ff.; Janbernd Oebbecke, Rechtliche Vorgaben für den Haushaltsausgleich und ihre Durchsetzung, Der Gemeindehaushalt 2009, p. 241, 244; Lars Martin Klieve, Das nordrhein-westfälische Stärkungspaktgesetz, Der Gemeindehaushalt 2012, p. 52, 54.
- 151.
See Martin Burgi, Kommunalrecht, 3rd ed. 2011, p. 97 ff.
- 152.
Karolin Herrmann, Kommunale Kassenkredite – Missbrauchsgefahr und Reformvorschläge, 2011, p. 88 f.
- 153.
Cf. Art. 84 I 7 and Art. 85 I 2 Basic Law. For details Ferdinand Kirchhof, in: Maunz/Dürig, Grundgesetz, vol. 5, Art. 84 notes 165 ff. (2011).
- 154.
See Stefan Mückl, Konnexitätsprinzip in der Verfassungsordnung von Bund und Ländern, in Henneke/Pünder/Waldhoff (eds.), Recht der Kommunalfinanzen, 2006, p. 33 ff.; Pinkl (note 24), p. 133 ff.; Hans-Günter Henneke, Die Kommunen in der Finanzverfassung des Bundes und der Länder, 5th ed. 2012, p. 274 ff., 336 ff.
- 155.
Angela Faber, Zahlungsunfähigkeit von Kommunen, in: Henneke/Pünder/Waldhoff (eds.), Recht der Kommunalfinanzen, 2006, § 35 note 21.
- 156.
Bundesgerichtshof, LKV 2003, p. 343, 344.
- 157.
Janbernd Oebbecke, Ausfallhaftung für zahlungsunfähige Kommunen?, in: Erichsen (ed.), Kommunale Verwaltung im Wandel, 1999, p. 171.
- 158.
See §§ 311 et seqq. of the Aktiengesetz (German Equities Act).
- 159.
See Faber (note 155), § 35.
- 160.
See for an overview Daniel Buscher, Konsolidierungshilfen und der Umgang mit der bestehenden Verschuldung nach der Föderalismusreform II, in: Hetschko/Pinkl/Pünder/Thye (eds.), Staatsverschuldung in Deutschland nach der Föderalismusreform II, 2012, p. 35, 49 ff. Generally Paul Kirchhof, Deutschland im Schuldensog, 2012, p. 145 ff.
- 161.
Cf. Pünder (note 2), Art. 115 note 47.
- 162.
See Pünder (note 2), Art. 115 notes 41 ff.
- 163.
See also § 39 I BHO. For the States level see e.g. Art. 83 Constitution of North Rhine-Westphalia; Art. 95 Constitution of Saxony; Art. 94 Constitution of Baden-Wuerttemberg.
- 164.
For a different opinion Gregor Kirchhof, in: von Mangoldt/Klein/Starck, Grundgesetz, vol. 3, 6th ed. 2010, Art. 109 note 85; P. Kirchhof (note 160), p. 209. Critically to the restrictions Pünder (note 2), Art. 115 note 55.
- 165.
Cf. Pünder (note 2), Art. 115 notes 47, 83.
- 166.
Cf. Alan J. Auerbach/Jagadeesh Gokhale/Laurence J. Kotlikoff, Generational Accounting: A Meaningful Way to Evaluate Fiscal Policy, Journal of Economic Perspectives 8 (1994), p. 73 ff.
- 167.
Cf. Pünder (note 25), p. 322 ff.
- 168.
See Art. 143d I 2 Basic Law; and Pünder (note 2), Art. 115 notes 48, 80 f., 155.
- 169.
Critically Pünder (note 2), Art. 115 note 49.
- 170.
See Pünder (note 2), Art. 115 notes 50, 84; Pinkl (note 24), p. 115 ff.
- 171.
Kommission von Bundestag und Bundesrat zur Modernisierung der Bund-Länder-Finanzbeziehungen (note 15), p. 7.
- 172.
Critically in regard to the municipalities Pinkl (note 24), p. 125 ff.; in regard to the statutory social insurance institutions Pünder (note 2), Art. 115 note 86.
- 173.
Critically Pünder (note 2), Art. 115 notes 70, 85; Magin (note 26), p. 265 f.; Henning Tappe, Haushaltsrechtliche Umsetzung der Artikel 109 und Artikel 115 GG n.F. in Bund und Ländern, in: Kastrop et al. (eds.), Die neuen Schuldenregeln im Grundgesetz, 2010, p. 432, 436 ff.; Koemm (note 100), p. 194 ff.
References
Hetschko, Clemens, Johannes Pinkl, Hermann Pünder, and Marius Thye (eds.). 2012. Staatsverschuldung in Deutschland nach der Föderalismusreform II – eine Zwischenbilanz, Hamburg: Bucerius Law School Press, 2012.
Pünder, Hermann. 2003. Haushaltsrecht im Umbruch – eine Untersuchung der Erfordernisse einer sowohl demokratisch legitimierten als auch effektiven und effizienten Haushaltswirtschaft am Beispiel der Kommunalverwaltung. Kohlhammer Verlag, 2003.
Pünder, Hermann. 2007. Staatsverschuldung, in: Isensee/Kirchhof (eds.), Handbuch des Staatsrechts der Bundesrepublik Deutschland. 3rd edn. Heidelberg: C.F. Müller Verlag, 2007. Vol. 5, § 123: pp.1323–1393.
Pünder, Hermann. 2008. Art. 110 GG (Haushaltsplan des Bundes). In: Friauf/Höfling (eds.), Berliner Kommentar zum Grundgesetz. Berlin: Erich Schmidt Verlag, 2008. Pp. 1–190
Pünder, Hermann. 2010. Art. 115 GG (Kreditbeschaffung). In Friauf/Höfling (eds.), Berliner Kommentar zum Grundgesetz. Berlin: Erich Schmidt Verlag, 2010. Pp. 1–137
Pünder, Hermann, 2011. Staatsverschuldung und Generationengerechtigkeit – Die neue “Schuldenbremse” im Vergleich zum überkommenen Recht. In: Die Professorinnen und Professoren der Bucerius Law School (eds.), Begegnungen im Recht – Ringvorlesung der Bucerius Law School zu Ehren von Karsten Schmidt anlässlich seines 70. Geburtstags, Pp. 271–293.
Pünder, Hermann. 2014. Staatsschulden. In: Kube et al. (eds.), Leitgedanken des Rechts, Festschrift für Paul Kirchhof zum 70. Geburtstag. Heidelberg: C.F. Müller Verlag, 2014. Vol. 2, pp. 1519–1528.
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Appendix: Legal Texts
Appendix: Legal Texts
1.1 German Basic Law (Grundgesetz)
1.1.1 Article 109 [Budget Management in the Federation and the Länder]
-
1.
The Federation and the Länder shall be autonomous and independent of one another in the management of their respective budgets.
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2.
The Federation and the Länder shall perform jointly the obligations of the Federal Republic of Germany resulting from legal acts of the European Community for the maintenance of budgetary discipline pursuant to Article 104 of the Treaty Establishing the European Community and shall, within this framework, give due regard to the requirements of overall economic equilibrium.
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3.
The budgets of the Federation and the Länder shall in principle be balanced without revenue from credits. The Federation and Länder may introduce rules intended to take into account, symmetrically in times of upswing and downswing, the effects of market developments that deviate from normal conditions, as well as exceptions for natural disasters or unusual emergency situations beyond governmental control and substantially harmful to the state’s financial capacity. For such exceptional regimes, a corresponding amortisation plan must be adopted. Details for the budget of the Federation shall be governed by Article 115 with the proviso that the first sentence shall be deemed to be satisfied if revenue from credits does not exceed 0.35 % in relation to the nominal gross domestic product. The Länder themselves shall regulate details for the budgets within the framework of their constitutional powers, the proviso being that the first sentence shall only be deemed to be satisfied if no revenue from credits is admitted.
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4.
A federal law requiring the consent of the Bundesrat may establish principles applicable to both the Federation and the Länder governing budgetary law, the responsiveness of budgetary management to economic trends, and long-term financial planning.
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5.
Sanctions imposed by the European Community on the basis of the provisions of Article 104 of the Treaty Establishing the European Community in the interest of maintaining budgetary discipline, shall be borne by the Federation and the Länder at a ratio of 65 to 35 %. In solidarity, the Länder as a whole shall bear 35 % of the charges incumbent on the Länder according to the number of their inhabitants; 65 % of the charges incumbent on the Länder shall be borne by the Länder according to their degree of causation. Details shall be regulated by a federal law which shall require the consent of the Bundesrat.
1.1.2 Article 110 [Federal Budget]
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1.
All revenues and expenditures of the Federation shall be included in the budget; in the case of federal enterprises and special trusts, only payments to or remittances from them need be included. The budget shall be balanced with respect to revenues and expenditures.
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2.
The budget for one or more fiscal years shall be set forth in a law enacted before the beginning of the first year and making separate provision for each year. The law may provide that various parts of the budget apply to different periods of time, divided by fiscal years.
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3.
Bills to comply with the first sentence of paragraph (2) of this Article as well as bills to amend the Budget Law or the budget itself shall be submitted simultaneously to the Bundesrat and to the Bundestag; the Bundesrat shall be entitled to comment on such bills within 6 weeks or, in the case of amending bills, within 3 weeks.
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4.
The Budget Law may contain only such provisions as relate to federal revenues and expenditures and to the period for which it is enacted. The Budget Law may specify that its provisions shall expire only upon promulgation of the next Budget Law or, in the event of an authorization pursuant to Article 115, at a later date.
1.1.3 Article 111 [Interim Budget Management]
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1.
If, by the end of a fiscal year, the budget for the following year has not been adopted by a law, the Federal Government, until such law comes into force, may make all expenditures that are necessary:
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(a)
To maintain institutions established by a law and to carry out measures authorised by a law;
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(b)
To meet the legal obligations of the Federation;
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(c)
To continue construction projects, procurements, and the provision of other benefits or services, or to continue to make grants for these purposes, to the extent that amounts have already been appropriated in the budget of a previous year.
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(a)
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2.
To the extent that revenues based upon specific laws and derived from taxes, or duties, or other sources, or the working capital reserves, do not cover the expenditures referred to in paragraph (1) of this Article, the Federal Government may borrow the funds necessary to sustain current operations up to a maximum of one quarter of the total amount of the previous budget.
1.1.4 Article 112 [Extrabudgetary Expenditures]
Expenditures in excess of budgetary appropriations or for purposes not contemplated by the budget shall require the consent of the Federal Minister of Finance. Such consent may be given only in the event of an unforeseen and unavoidable necessity. Details may be regulated by federal law.
1.1.5 Article 113 [Increase of Expenditures]
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1.
Laws that increase the budget expenditures proposed by the Federal Government, or entail or will bring about new expenditures, shall require the consent of the Federal Government. This requirement shall also apply to laws that entail or will bring about decreases in revenue. The Federal Government may demand that the Bundestag postpone its vote on bills to this effect. In this event the Federal Government shall submit its comments to the Bundestag within 6 weeks.
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2.
Within 4 weeks after the Bundestag has adopted such a law, the Federal Government may demand that it vote on the law a second time.
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3.
If the bill has become law pursuant to Article 78, the Federal Government may withhold its consent only within 6 weeks and only after having initiated the procedure provided for in the third and fourth sentences of paragraph (1) or in paragraph (2) of this Article. Upon the expiration of this period such consent shall be deemed to have been given.
1.1.6 Article 114 [Submission and Auditing of Accounts]
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1.
For the purpose of discharging the Federal Government, the Federal Minister of Finance shall submit annually to the Bundestag and to the Bundesrat an account of all revenues and expenditures as well as of assets and debts during the preceding fiscal year.
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2.
The Federal Court of Audit, whose members shall enjoy judicial independence, shall audit the account and determine whether public finances have been properly and efficiently administered. It shall submit an annual report directly to the Bundestag and the Bundesrat as well as to the Federal Government. In other respects the powers of the Federal Court of Audit shall be regulated by a federal law.
1.1.7 Article 115 [State Credit]
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1.
The borrowing of funds and the assumption of surety obligations, guarantees, or other commitments that may lead to expenditures in future fiscal years shall require authorization by a federal law specifying or permitting computation of the amounts involved.
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2.
Revenues and expenditures shall in principle be balanced without revenue from credits. This principle shall be satisfied when revenue obtained by the borrowing of funds does not exceed 0.35 % in relation to the nominal gross domestic product. In addition, when economic developments deviate from normal conditions, effects on the budget in periods of upswing and downswing must be taken into account symmetrically. Deviations of actual borrowing from the credit limits specified under the first to third sentences are to be recorded on a control account; debits exceeding the threshold of 1.5 % in relation to the nominal gross domestic product are to be reduced in accordance with the economic cycle. The regulation of details, especially the adjustment of revenue and expenditures with regard to financial transactions and the procedure for the calculation of the yearly limit on net borrowing, taking into account the economic cycle on the basis of a procedure for adjusting the cycle together with the control and balancing of deviations of actual borrowing from the credit limit, requires a federal law. In cases of natural catastrophes or unusual emergency situations beyond governmental control and substantially harmful to the state’s financial capacity, these credit limits may be exceeded on the basis of a decision by a majority of the Bundestag’s Members. The decision has to be combined with an amortization plan. Repayment of the credits borrowed under the sixth sentence must be accomplished within an appropriate period of time.
1.2 Act on the Implementation of Article 115 of the Basic Law (“Article 115 Act” of 10 August 2009)
1.2.1 Section 1 [Borrowing Authorizations]
The Budget Act shall determine the amount up to which the Federal Ministry of Finance may borrow:
-
1.
to cover expenditures,
-
2.
to maintain orderly cash management (liquidity loans).
Insofar as that these liquidity loans have been repaid, fresh recourse may be taken to authorization. Liquidity loans may fall due no later than 6 months after the expiry of the fiscal year for which they have been taken out.
1.2.2 Section 2 [Principles for the Budgeting of Borrowing to Cover Expenditures]
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1.
When budgeting revenues and expenditures in normal economic conditions, revenues and expenditure shall in principle be balanced without revenues from borrowing; revenues and expenditures shall be adjusted for financial transactions. Borrowing of up to 0.35 % in relation to nominal gross domestic product shall be permissible as a structural component.
-
2.
If an economic trend deviating from the normal conditions is expected for the fiscal year, as a cyclical component, the upper limit on revenues from borrowing to be included in the budget under subsection (1) above shall vary by the amount of those revenues from borrowing or by the amount of budget surpluses which corresponds to the expected effect of the economic trend on the budget.
1.2.3 Section 3 [Adjustment for Financial Transactions]
Expenditures for the acquisition of holdings, for repayments of principal to the public sector and for the granting of loans shall be factored out of the expenditures under section 2 subsection (1), first half-sentence; those revenues from the sale of holdings, from borrowing from the public sector and from loan repayments shall be factored out of the revenues under section 2 subsection (1), first half-sentence.
1.2.4 Section 4 [Principles for Determining Permissible Structural Borrowing]
The Federal Statistical Office shall calculate the gross domestic product decisive in determining permissible structural borrowing under section 2 subsection (1), second sentence. The nominal gross domestic product for the year preceding the preparation of the budget shall serve as the reference.
1.2.5 Section 5 [Cyclical Component]
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1.
The amount of the cyclically induced revenues from borrowing or budget surpluses to be included in the budget under section 2 subsection (2) shall be derived from the expected economic trend’s deviation from normal economic conditions.
-
2.
A deviation of the economic trend from normal economic conditions shall be deemed to exist if an under-utilization or over-utilization of aggregate productive capacities is expected (output gap). This shall be the case if the potential output to be estimated on the basis of a cyclical adjustment method deviates from the expected gross domestic product for the fiscal year for which the budget is prepared.
-
3.
The cyclical component shall be the product of the output gap and budget sensitivity which indicates how the revenues and expenditures of the Federation change when overall economic activity changes.
-
4.
In agreement with the Federal Ministry of Economics and Technology, the Federal Ministry of Finance shall, by means of a statutory instrument and without the consent of the Bundesrat, stipulate the details of the procedure for determining the cyclical component in conformity with the cyclical adjustment method applied within the framework of the European Stability and Growth Pact. The procedure shall be reviewed and developed further on a regular basis taking the current state of knowledge into account.
1.2.6 Section 6 [Exceptional Situations]
In the event of natural disasters or unusual emergency situations which are outside of the control of government and have a major impact on the financial position of the government, the borrowing limits under section 2 may be exceeded on the basis of a decision of the Bundestag under the sixth sentence of paragraph (2) of Article 115 of the Basic Law. This decision shall be combined with an amortization plan. Repayment of the amounts borrowed under the first sentence above shall be effected within an appropriate period of time.
1.2.7 Section 7 [Control Account]
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1.
Where actual borrowing deviates from the amount which, at the end of the relevant fiscal year, is arrived at as the upper limit under section 2 on the basis of the economic trend’s actual effect on the budget, this deviation shall be posted to a variance account (control account). Insofar as the exemption in the sixth sentence of paragraph (2) of Article 115 of the Basic Law has been exercised, the amount to be posted shall be adjusted for the increased net borrowing as a result of the corresponding decision. The deviation to be posted shall be determined annually on 1 March of the year following the fiscal year and updated over the further course of the year, for the last time on 1 September of the year following the fiscal year.
-
2.
Where the balance is negative, steps shall be taken to balance the control account. The control account’s negative balance is not to exceed a threshold of 1.5 % in relation to nominal gross domestic product. The decisive gross domestic product shall be determined under section 4.
-
3.
Where the control account’s balance is negative and where the amount of the balance exceeds 1 % in relation to nominal gross domestic product, the borrowing authorization under section 2 subsection (1), second sentence, shall decrease in the next year respectively by the excess amount, but not exceeding 0.35 % in relation to nominal gross domestic product; the decrease shall become effective only in years when there is a positive change in the output gap.
1.2.8 Section 8 [Rights of Deviation in the Case of Supplements to the Budget Act and to the Budget]
In the case of supplements to the Budget Act and the budget, the amount of permissible borrowing calculated under section 2 subsection (1), second sentence, may be exceeded up to the amount of 3 % of the tax revenues included in the budget. New measures which lead to increases of expenditures or reductions in revenue may not be budgeted for in this supplement. To calculate the cyclical component, only the expected economic trend shall be updated. The provisions of section 7 shall remain unaffected.
1.2.9 Section 9 [Transitional Arrangement]
-
1.
This Act shall be applied for the first time to the federal budget for the year 2011.
-
2.
Section 2 subsection (1) shall apply during the period from 1 January 2011 to 31 December 2015 subject to the proviso that the structural deficit for the 2010 fiscal year is reduced in equal steps from 2011 onwards.
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Pünder, H. (2016). Objects and Procedures of Budgetary Planning and Limits to Borrowing (“Debt Brake”) in the Federal Republic of Germany. In: Morrison, F. (eds) Fiscal Rules - Limits on Governmental Deficits and Debt. Ius Comparatum - Global Studies in Comparative Law, vol 20. Springer, Cham. https://doi.org/10.1007/978-3-319-41205-4_5
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