Different Times, Different Rules? Germany’s Constitutional Court and the Budget Crisis

In mid-November, Germany’s Constitutional Court in Karlsruhe ruled against the Ampelkoalition’s efforts to get around the country’s “debt brake” to use “special funds” to finance its ambitious legislative agenda. At issue was a budgeting maneuver to move 60 billion euros of unused pandemic aid to a fund for Germany’s green transition. But the ruling raises questions about the government’s ability to access a total of €869 billion, which is not included in the federal budget but in 29 different “special funds.” It also forced the government to freeze new spending and put approval of the 2024 budget on hold.

In 2009, Germany introduced the Schuldenbremse – limiting the government’s structural budget deficit to 0.35% of gross domestic product – following the global financial crisis. However, the government had to suspend the debt brake in 2020 as a result of the COVID-19 pandemic, which it is allowed to do in “exceptional emergencies.” On Tuesday, Chancellor Olaf Scholz urged lawmakers to override Germany’s borrowing limits for a fourth consecutive year.

Join the ACG for a discussion about the foreign policy, national security, energy policy, and domestic implications of Germany’s budget crisis with Bundestag member Metin Hakverdi (SPD) on Wednesday, December 6.

Metin Hakverdi joined the Social Democratic Party in 2002 and has been a member of the German Bundestag since 2013. He serves on the Bundestag’s Committee on European Union Affairs and on the Budget Committee. He is the Chairman of the USA/North America Working Group within the SPD Parliamentary Group and a member of the German-American Parliamentary Friendship Group in the German Bundestag. Before being elected to the Bundestag, Mr. Hakverdi was a member of the Parliament of the Free and Hanseatic City of Hamburg from 2008 to 2013, where he was on the Budget Committee and the Committee of Public Companies and Assets.

Mr. Hakverdi attended high school in Simi Valley, California, in 1985/86 and studied law at the Christian-Albrecht University in Kiel and at Indiana University’s Maurer School of Law. He was a distinguished visitor at the American Institute for Contemporary German Studies in 2019 and a 2020 John F. Kennedy Memorial Policy Fellow at Harvard’s Center for European Studies (CES).