Federal Audit Office: State finances in "critical condition" - traffic light has to "turn oar"

The Federal Audit Office certified that the German state budget was in a "critical condition" and called on the traffic light parties to act.

Bonn - high debts, problematic subsidies, overly diversified expenditure: the Federal Audit Office paints a gloomy picture of the state budget. "The federal finances are in a critical situation," says a report by the authority that was sent to the Bundestag on Wednesday. What is needed is "an honest cash slump, effective structural reforms and resolute priorities". Left chairwoman Susanne Hennig-Wellsow criticized the authority's proposals as "old hats".

In its inventory, the Federal Court of Auditors criticized the fact that budget surpluses were accumulated in the good economic years from 2014 to 2019 - but "an active stabilization strategy with sustainable measures to improve the budget structure" was largely omitted.

"Less than two years of the corona pandemic * were enough to severely weaken federal finances."

Federal budget in critical condition - Federal Audit Office calls for quick action

"Now it is important to turn things around as quickly as possible," warned the Federal Audit Office.

"Simply waiting for better economic conditions will not be enough to make the federal budget resilient, to finally tackle the major future tasks and at the same time to save future generations from an excessive debt burden."

Only with a "resilient federal budget" could future tasks * such as climate protection and digitization be mastered "on their own, sustainably and in a generation-appropriate manner", it said.

The recommendations of the Court of Auditors come right into the hot phase of coalition negotiations between the SPD, the Greens and the FDP.

The question of funding is considered one of the most difficult topics in the talks.

The Federal Audit Office calls on the new government to “boldly criticize spending”

Specifically, the Federal Audit Office demanded "courageous criticism of expenditure with the aim of concentrating on the most pressing tasks assigned to the federal government by the Basic Law" from the next federal government.

What is also needed is a "spending moratorium, according to which, for every new measure, counter-financing is in principle ensured by ending other measures".

In addition, social transfer payments would have to be geared more precisely "to the really needy and weak".

In order to improve the income side, the Federal Court of Auditors advised "a stronger fight against tax fraud".

A critical review of tax subsidies and concessions "with insufficient or insufficient economic impact or climate-damaging effects" is also important.

Federal Audit Office advocates maintaining the debt brake - would be the "wrong way"

The Bonn authority was very clearly against the abolition of the debt brake.

"The temptation of further indebtedness, freed from the limits of the debt rule, is not the means of choice to solve the tasks at hand," she said.

Court of Auditors Kay Scheller emphasized that the debt brake had proven itself in the Corona crisis and enabled aid worth billions.

"A relaxation or even abolition of the debt rule would be the wrong way and a surrender to the problems without having discussed solutions at all."

Solutions would not lie "in non-transparent secondary budgets such as funds, special-purpose vehicles or other structures, but in a courageous and clear consolidation course," explained Scheller.

"I don't see any alternative to that."

Federal Audit Office worries about state finances - the head of the left exercises criticism

"What the Federal Audit Office is proposing are old hats", judged the left chairwoman Hennig-Wellsow *.

"What is necessary for a state that is able to act is a greater contribution of high incomes and wealth and the possibility of financing future investments through state borrowing," she told the AFP news agency.

At the same time, Hennig-Wellsow warned the traffic light parties to present "something substantial" in terms of budget.

"If the government's own officials are already warning the federal government that the state finances will soon be in a mess, it will be high time," she said.