Spending lower than expected: the federal government will take on less debt in 2022

expenses lower than expected
The federal government will take on less debt in 2022

The corona pandemic, high interest payments and the Ukraine war should have pushed up the amount of debt for the past year significantly. But the federal government recorded a lower minus than planned – 23.5 billion euros remain unused. Earnings also exceed expectations.

The federal government incurred less debt than planned last year. Instead of the estimated 138.9 billion, only 115.4 billion in fresh loans and thus 23.5 billion euros less were taken out, the Federal Ministry of Finance announced. Among other things, the expenses related to the Ukraine war and the corona pandemic were lower than expected. The figures are still provisional.

Budgeting for the past year had been unusually complex. According to the original draft, a supplementary budget was decided – in particular because of measures in connection with the Russian war of aggression in Ukraine and its consequences. Overall, the federal government assumed expenditure of 495.8 billion euros. According to the preliminary figures now presented, however, they only amounted to 481.3 billion euros, i.e. 14.5 billion euros less. At the same time, revenues were EUR 9.0 billion higher than expected at EUR 365.9 billion. According to the information from the Ministry of Finance, this plus was mainly due to higher tax revenues.

The reduced expenditure was therefore largely due to the fact that the additional funds planned as a precaution in connection with the Ukraine war were not required to the extent expected. Of the 8.7 billion euros, 5.1 billion were not used. Revenue related to Corona was 2.6 billion euros lower. In addition, interest payments were around one billion euros below plan.

Lindner: Use loans only to the extent necessary

The provisional budget statement shows “that we do not exhaust all legal possibilities of borrowing by hook or by crook, but only to the extent necessary,” explained Federal Finance Minister Christian Lindner. At the same time, he warned that “planning and approval procedures must be accelerated so that investment funds are really used”.

The so-called special funds, of which the federal government has several, are booked outside of the core budget. This includes the Economic Stabilization Fund (WSF), which the government filled with 200 billion euros last year to alleviate the energy crisis. According to the Federal Ministry of Finance, around 30 billion flowed out of it last year. Because of the war in Ukraine, a special fund for the Bundeswehr was set up, which includes 100 billion euros. According to information from the ministry, no money flowed from here last year. However, contracts with armaments companies with a volume of just over ten billion euros have been concluded.

source site-32