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Second supplementary budget constitutionally questionable

Jun 29, 2020

Graphic - Second supplementary budget

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The German SAI considers reaffirming emergency situation to be a vain effort  

On 29 June 2020, at the expert hearing of the parliamentary Budget Committee, the German SAI criticised the second supplementary budget. We hold that seen in particular from the constitutional law perspective, this instrument is no viable option. Our concerns focus on the following major aspects:

  • More new borrowing beyond the 1st supplementary budget is unnecessary and constitutionally questionable. We suggest using reserves instead and advise against shifting future expenses to off-budget funds.
  • In accordance with the budget accuracy and budget maturity principles, the funding required and available within the current 2020 budget needs to be estimated in a more reliable manner.
  • We advise placing more emphasis on the effectiveness of the economic stimulus package. Less and better targeted funding may add more value.
  • The federal states should take their share in financial accountability of the public sector.
  • Trust is good, but control is better – increasing the federal share in local government housing is a good idea but badly done.
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