Karlsruhe

The Act was found incompatible with several articles of the Basic Law.

In a judgment delivered on 15 November 2023, the Federal Constitutional Court declared the Second Supplementary Budget Act 2021 void. The Act, which retroactively amended the 2021 federal budget, allowing the transfer of a borrowing authorization of €60 billion – granted in response to the COVID-19 pandemic but unused in 2021 – to the country’s Energy and Climate Fund, was found to be incompatible with several articles of the Basic Law.

The applicants, comprising 197 members of the Bundestag's CDU/CSU parliamentary group, contested the Act on constitutional grounds. The Court's decision was based on three main reasons. Firstly, it held that the legislator failed to establish a sufficient factual connection between the declared emergency, related to the COVID-19 pandemic, and the crisis management measures financed by the emergency borrowing. Secondly, the Act was found to violate constitutional principles of yearly budgeting and annuality by de facto allowing the borrowing authorizations to be used over multiple fiscal periods. Lastly, the Court ruled that adopting the Second Supplementary Budget Act after the end of the 2021 fiscal year contradicted the principle that the budget must be determined in advance.

As a result of this decision, the Climate and Transformation Fund – as it was renamed in 2022 – was reduced by €60 billion. The Court emphasized that if the state had incurred obligations it could no longer meet due to this reduction, the legislator must compensate for it through alternative means.

Reference: Judgment of 15 November 2023 - 2 BvF 1/22.

News available at bundesverfassungsgericht.de de