Audit Court: Federal Republic of Germany (Rewritten)
The federal budget for 2026, proposed by Finance Minister Lars Klingbeil, is facing criticism from the Court of Auditors. The report, released recently, suggests that the federal government's spending habits may be unsustainable.
Klingbeil plans to submit the budget to the Bundestag next week, with planned expenditures totaling €520.48 billion for the year, a 17.47 billion euro increase from the previous year. However, nearly one-third of the budget is planned to be newly borrowed, amounting to approximately €174 billion euros.
The Court of Auditors has expressed concerns about the federal government's financial management, stating that the government is structurally living beyond its means. The report indicates that the federal government is in a state of structural deficit, and the proposed budget for 2026 does not ensure the permanent financing of core state tasks.
Moreover, the Court of Auditors warns that in the medium term, a significant portion of the federal budget will be tied up in interest payments due to new debts. The report predicts a potential debt spiral due to the high level of new debts in the proposed budget for 2026.
The Court of Auditors' concerns about the federal government's financial management remain unaddressed in the proposed budget for 2026. The report accuses Finance Minister Lars Klingbeil of driving the federal government into a debt spiral, and it suggests that the federal government is not financially self-sufficient.
The budget for 2026 also includes over €84 billion euros in loans from special funds. Klingbeil's proposed budget for 2026 includes financing almost every third euro 'on credit'. The Court of Auditors has criticized the budget as being far from a solid financial economy.
New debts are only a short-term solution, according to the Court of Auditors. They state that these debts reduce reform pressure, and the potential debt spiral could have significant implications for the future financial stability of the federal government.
As the budget for 2026 is set to be presented to the Bundestag next week, the Court of Auditors' report raises important questions about the long-term financial sustainability of the federal government's spending habits. It remains to be seen how the government will address these concerns and ensure the financial stability of the nation.
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