Excessive emergency loans, late payments and shadow budgets

The Berlin Court of Audit has called on the red-green-red coalition for greater financial transparency and a stricter austerity course before it starts government. At the same time, the president of the Court of Audit, Karin Klingen, warned on Monday in the presentation of the 2021 annual report not to overstretch the Corona emergency declaration to avoid debt.

As a result of the corona crisis, Berlin’s state budget debt will reach a record level of 63.7 billion euros by the end of 2020. The reason is newly raised, pandemic -related loans of 7.3 billion euros, the House of Representatives cleared the way for it in 2020 by declaring an exceptional emergency situation.

However, according to the Court of Audit, such high loans are not necessarily necessary to cope with the pandemic in 2020; according to auditors, half a billion euros in emergency loans is enough. In addition, the Court of Audit criticized the state for parking 5.4 billion euros of emergency loans in a pandemic reserve for subsequent years to spend the money on other purposes.

“Emergency loans should not be used to finance additional measures that have always been desired, but should be used to combat the emergency,” ACA President Klingen said.

More than 4 billion euros from emergency loans have not yet been spent, a small part of which has been used to finance university buildings, for example, even if they have nothing to do with corona emergencies. The “lump-sum savings” of these emergency loans “violate budget law,” Klingen said.

The debt brake provides for emergencies where loans and higher debts can be eliminated, he said. But these credits can only be used to fight the emergency and not for any other political purpose.

Also aiming at the future red-green-red coalition of old and new alliance partners SPD, Greens and Left, the Court of Audit is urging a clearer austerity course. The coalition’s goal of presenting a balanced budget by the end of the 2026 legislative term is “not ambitious enough.

This includes considerations of the government’s future alliance with the coalition agreement not to start paying emergency loans until the end of the legislative period. The consideration of only repaying loans if they are not exhausted has also been criticized by auditors.

So far, plans have called for balancing the 2022/23 budget by using all reserves, they say. For the next two years, there were funding gaps of 2.7 billion euros each, they said. For a “sustainable and generationally fair financial policy,” Berlin must return to a balanced budget and economic -focused debt reduction.

The Court of Auditors also casts serious doubt on the management of coalition finances in state-owned companies. The reason for this is the announcement that the losses of state-owned companies will be wiped out in the 2022/23 budget through renewed emergency loans, even though billions are still in pandemic reserves.

The situation is similar for investments. These should be elevated, which is also commended by the Court of Auditors. But here too, the state wants to make an effort on the part of state companies. “We see plans to shift investment activity to areas outside the main budget as problematic,” Klingen said.

At the same time, Klingen warned of the consequences of this shadow budget practice to cover investments. “If, for example, state companies or special funds take out loans for this purpose, it not only increases their debt levels but also the state’s financial risk,” Klingen said. .

In addition to the recorded state debt of 63.7 billion euros, there is also debt of state companies, funds and institutions. These have increased significantly in recent years and reached 21.5 billion euros in 2020. Per capita debt has also increased: From approximately 20,100 euros in 2019 to 22,150 euros last year – 10,000 euros more more per capita than the average for federal states.

Debt brake avoidance should be avoided by outsourcing borrowing funds, subsidiary budgets and other construction. For this reason, the Audit Court will review such outsourcing of loans and investments to state -owned companies in the near future. the alliance partners “are also setting the course for dealing with high debt in the future,” Klingen said. “It will have implications for several generations.”