Federal Court of Auditors warns traffic light against breaking the law

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Finance Minister Lindner, Chancellor Scholz: The planned expansion of the special fund for the Bundeswehr is harshly criticized

Photo: IMAGO/Frank Ossenbrink

We sharply criticise the Federal Government's plans to expand the purpose of the special fund for the Bundeswehr. The top financial controllers of the federal government warn Defense Minister Boris Pistorius (SPD) and the traffic light coalition against a breach of the law.

"The funds of the special fund are no longer to be used exclusively to finance important equipment projects. The planned expansion runs counter to the purpose pursued by the constitutional legislature with the special fund," according to a confidential report by the financial controllers on Monday, which is available to SPIEGEL.

Auditors complain about lack of separation

In mid-August, the cabinet decided with the so-called Budget Financing Act that the special fund should not only be reserved for large-scale projects that are intended to make a significant contribution to strengthening Germany's alliance and defense capability. Rather, the 100 billion euro loan is also intended to serve "measures in the field of arms investment" – a formulation that sounds as general as it is meant. The German government now also includes "research, ammunition spending, infrastructure projects" as well as investments in "information technology, to protect and ensure access to key technology and logistics for the Bundeswehr".

For the Federal Court of Auditors, this goes too far. The auditors complain that the draft budget for 2024 lacks a clear separation between the regular budget of the Ministry of Defense and the special fund. Equipment projects that were previously financed from the budget of the Defence Ministry are now to be paid for from the special fund; and acquisitions for which the special fund was intended could become a burden on the regular budget as soon as the special fund was raised, the financial controllers complain.

Her warning is unequivocal: "This concept of 'mixed financing' is legally inadmissible."

The German government wants to use the special fund to procure US F-35 stealth jets. Type 130 corvettes, F126 frigates and the 212 CD hunting submarine are also to be purchased. In addition, the successors to the Marder infantry fighting vehicle and the Fuchs troop carrier are to be financed. But the financing of the planned large-scale projects would be jeopardized if the special pot provided by the traffic light after Russia's invasion of Ukraine now also had to be used for other, smaller purchases, warns the Federal Court of Auditors. "If projects are only 'financed' from the special fund, the risk of additional burdens on the federal budget increases considerably," the auditors write.

"Fundamentally revise" financial plans

When setting up the special fund, the aim was to "finance defined large-scale projects over the course of a year," they emphasize. However, the planned amendment to the law on the special fund "runs counter to the purpose pursued by the constitutional legislature with the special fund," the report says.

The financial controllers are calling on Minister Pistorius and the traffic light government to "fundamentally revise" the financial plans for equipping the Bundeswehr and remedy the shortcomings.

The Union sees itself confirmed in its criticism of the use of the special fund. "If the federal government doesn't want to listen to the opposition, then it should at least listen to the Federal Court of Auditors," CDU budget politician Ingo Gädechens told SPIEGEL. "According to the Federal Court of Auditors, what Chancellor Scholz and Defence Minister Pistorius are planning for the Bundeswehr special fund is unconstitutional and illegal. The Bundeswehr special fund is now to be used to plug budget holes," said the rapporteur of the Union parliamentary group for the budget of the defense ministry. I can only hope that the federal government will finally hear the shot and change course," said Gädechens.

On Tuesday, Finance Minister Christian Lindner (FDP) will present the draft budget for the coming year in the Bundestag, and on Wednesday Defense Minister Pistorius will speak to MPs. The Bundestag is expected to approve the budget at the beginning of December. Until then, the details of the defense budget are likely to be wrestled with.