The establishment of the annual budget of the
Federal Republic of Germany
Germany,, officially the Federal Republic of Germany, is a country in Central Europe. It is the second most populous country in Europe after Russia, and the most populous member state of the European Union. Germany is situated between ...
is known as the German budget process.
Purpose
The primary purpose of the budget is to create an overview of the country's revenues and expenses for the following
fiscal year
A fiscal year (or financial year, or sometimes budget year) is used in government accounting, which varies between countries, and for budget purposes. It is also used for financial reporting by businesses and other organizations. Laws in many ...
or years. Since the budget is based on past expenditures, it is merely a prediction of the future which can lead to unexpected budget deficits as the fiscal year progresses. In the short term, such deficits are commonly financed by borrowing money which has led to the significant
long-term debt of the German federal government.
Procedure
The
Bundestag
The Bundestag (, "Federal Diet") is the German federal parliament. It is the only federal representative body that is directly elected by the German people. It is comparable to the United States House of Representatives or the House of Common ...
passes the budget as an addendum to the annual or bi-annual budget act (Art. 110,
Basic Law). Revenues and expenses are separated by
ministries and other administrative entities.
Budget guidelines
Specific guidelines established by law govern the creation of the budget. Specifically, these are:
# ''Completeness'': the budget must include all instances of revenues and expenditures separately.
# ''Clarity'': the budget must be organized along ministry and functional lines.
# ''Unity'': the budget must include all revenues and expenditures
# ''Accuracy'': revenues and expenditures must be estimated based on actual fair market value or expected values. To avoid manipulations, such estimates are conducted by a separate official body.
# ''Historical Succession'': the budget must be enacted before the fiscal year starts. If there is no budget for the current fiscal year, the previous budget continues in effect.
# ''Specificity'': expenditures must be designated as falling into a specific area, at a specific time, and at a specific level.
# ''Publicity'': all debates on the budget in the Bundestag as well as the final enacted budget are publicly available and accessible. Some expenditures, however, may be classified with appropriate restrictions on who can access information on those.
Example Budget
The federal budget for 2021 is €369.3 billion
Germany's budget for the 2005 fiscal year can be found below, which also outlines the basic budget structure.
;Notes
References
Germany: Ministry of Finance's Task Force Recommends Introduction of Performance Budgeting and Accrual Accounting, Michel Lazare, IMF/FAD
{{National government budgets
Germany
Germany,, officially the Federal Republic of Germany, is a country in Central Europe. It is the second most populous country in Europe after Russia, and the most populous member state of the European Union. Germany is situated betwe ...
Government of Germany