The country’s true opposition is not located in the German Bundestag under the dome of the Reichstag, but resides at Adenauerallee 81 in Bonn. Here is the control center of Kay Scheller, the President of the Federal Audit Office.
With his 900 examiners, he researches the financial conduct of Berlin’s politicians. His weapon is the slide rule. He draws his strength from the facts.
In the midst of a world of self-marketing and public relations, the Federal Court of Auditors is the small island of fact. There are opinions. And there are facts. Here are the ten uncomfortable truths that Kay Scheller and his team have brought to light over the past few weeks and published yesterday.
Truth 1: The state can do anything but be frugal. Like the little Häwelmann in Theodor Storm, he prefers an eternal more, more, more. Compared to the last year before the crisis, 2019, household spending in 2021 rose by 200 billion euros to a peak of 556.6 billion euros – i.e. by almost 65 percent.
Truth 2: The future ranks with the state under further running, contrary to what is promised in election campaigns. Around 12 percent of the budget is spent on investments. Around 88 percent of the budget volume is effectively excluded from changes because they affect legal claims (e.g. social benefits) or contractual obligations (e.g. interest payments). According to the Court of Auditors, the federal budgets are “largely petrified”.
Truth 3: The government is trying to cover up the situation by outsourcing debts to so-called special funds, says Scheller. By 2020, the federal government’s debt was 1.3 trillion euros and was built up over 70 years.
In the crisis budgets of 2020, 2021 and 2022, 800 billion new debts were added, which is why the total federal debt is now 2.1 trillion. So it’s no wonder: The real net borrowing is significantly higher than the amounts shown in the federal budget.
Truth 4: The interest burden will make things difficult for future generations, especially since the interest rates of the ECB and thus the borrowing costs of the debtor are rising. The interest figures in 2021 were four billion euros, for 2023 around 40 billion euros are now planned due to the interest rate increases by the ECB.
Truth 5: The state is a big spendthrift that mainly feeds its own bureaucracy. The basic pension, which has been in force since January 2021 – which primarily benefits those people who have worked hard and whose pension is still not enough to live on – is a real bureaucratic monster. 1.3 billion euros in benefits are offset by 0.4 billion euros in administration costs. That means: 31 percent of the money goes to bureaucrats and not to the needy.
Truth 6: Unbelievable, but true – some of the taxpayers’ money is not awarded according to measurable criteria, but raffled. With its Digital program, the Federal Ministry of Economics now wanted to advance the digitization of companies in Germany. However, the companies are selected at random. The Federal Court of Auditors writes: “In the 500 million euro Digital Now program, the Federal Ministry of Economics is giving away funding for the digitization of companies instead of aligning them on the basis of sensible criteria.”
Truth 7: Even climate protection is being misused to finance self-employment in the public sector. Only 16 percent of the subsidies from the forest climate fund – after all, 88 billion euros in the past nine years – “served directly to adapt the forests to climate change, to reduce CO2 or to increase CO2 binding.” Most of the money went to monitoring forest dieback and creating brochures and websites. The Federal Court of Auditors judged: “For nine years, the federal government has been funding projects with 88 million euros from the forest climate fund, most of which have had no verifiable improvement for forest and climate.”
Truth 8: The state is cheating itself. For the economic stimulus package, which was actually intended to deal with the corona pandemic, the Ministry of Defense quickly invented a new use of funds. The Federal Court of Auditors says: “Instead of bringing forward investments and thus providing short-term economic stimuli, the Federal Ministry of Defense used funds from the economic stimulus package to pay for rents, leases and the security of properties.”
Gabor Steingart is one of the best-known journalists in the country. He publishes the newsletter The Pioneer Briefing. The podcast of the same name is Germany’s leading daily podcast for politics and business. Since May 2020, Steingart has been working with his editorial staff on the ship “The Pioneer One”. Before founding Media Pioneer, Steingart was, among other things, Chairman of the Management Board of the Handelsblatt Media Group. You can subscribe to his free newsletter here.
Truth 9: When it comes to Europe, the German government willfully looks the other way. The Court of Auditors writes that they “failed” to determine the liability risks of the EU. Borrowing from the EU pot, declared lawful by the constitutional court yesterday, is constantly being expanded – without a risk assessment being carried out for the federal budget: “The federal government must keep an eye on whether and to what extent EU liabilities can affect the federal budget.”
These numbers tell a story that tells of the longing for the permanent present. Or to paraphrase Martin Luther: “Lies are like snowballs: the longer you roll them, the bigger they get.” Truth 10.