Constitutional Court to Review Schleswig-Holstein’s 2024 Budget
The Constitutional Court of the German state of Schleswig-Holstein is set to hold a hearing today (10:00 AM) to consider a constitutional complaint filed by the Social Democratic Party (SPD) and the Free Democratic Party (FDP) against the state’s 2024 budget. The complaint challenges the constitutionality of three emergency loans taken out by the state’s governing coalition of the Christian Democratic Union (CDU) and the Green Party to finance a portion of the 2024 expenditure.
Background of the Emergency Loans
The CDU and Green coalition justified the emergency loans by pointing to three factors: the ongoing Russian invasion of Ukraine, the lingering effects of the COVID-19 pandemic, and the severe storm that ravaged the Baltic Sea coast in October 2023. According to the state’s preliminary financial statements, Schleswig-Holstein will effectively borrow 493.8 million euros through the emergency loans in 2024.
Initially, the state parliament had authorized the government to borrow up to 1.5 billion euros in emergency loans. However, this amount was reduced to 1.2 billion euros in October 2023 through a supplementary budget.
Arguments of the SPD and FDP
The SDP and FDP argue that all three emergency loans are unconstitutional. They contend that the CDU and Green coalition has failed to demonstrate that the exceptional circumstances required for borrowing under the state constitution are met. Specifically, they argue that the financial challenges faced by the state do not rise to the level of a true emergency.
Opposition’s Defense
The CDU and Green coalition maintain that the emergency loans are necessary to address the unprecedented challenges facing Schleswig-Holstein. They argue that the war in Ukraine has caused significant economic disruption, the pandemic has placed a strain on healthcare resources, and the storm has caused extensive damage to infrastructure.
Court Proceedings
The Constitutional Court will hear arguments from both sides today. The court’s decision is expected to take several months to be issued.
Implications for the State Budget
If the court upholds the complaint, the state government will be forced to adjust its budget to eliminate the unconstitutional emergency loans. This could lead to significant cuts in spending or increases in taxes.
Political Consequences
The court’s decision could also have political implications. If the emergency loans are deemed unconstitutional, it would be a major setback for the CDU and Green coalition, which has defended its borrowing as necessary to protect the state’s citizens and economy. The outcome could also affect the fortunes of the SPD and FDP, which are seeking to regain power in the next state election.
Public Interest
The case has attracted considerable public interest, as it raises important questions about the limits of government borrowing and the role of the courts in overseeing public finances. The court’s decision is expected to be closely watched by other German states and by financial analysts.
