How Black-Green wants to prevent an unconstitutional budget in NRW

fFinancial policy events rarely roll over one another. The budget experts in the ministries and in parliament are used to working on their drafts without great time pressure. Things are different in North Rhine-Westphalia at the moment. Since a devastating verdict by the State Audit Office (LRH), budget hectic has broken out in the largest federal state.

The most recent highlight of the events was that on Tuesday afternoon the black-green cabinet saw no other option but to do what it actually wanted to avoid: it identified an exceptional emergency situation for the current and next year in order to, despite the debt brake, make new constitutional payments to be allowed to take out billions in loans.

Until now, finance minister Marcus Optendrenk (CDU) believed that he did not have to use a trick to give the economic-psychologically problematic signal of an emergency, despite the many overlapping challenges from the Ukraine war and refugee development to the energy crisis and inflation. He wanted to top up his “crisis management” rescue package with five billion euros that were left over from the country’s Corona rescue package, which was limited until the end of December. That would have had the nice effect that the so-called core budget of the state would have managed without new debts, so North Rhine-Westphalia would have formally maintained the “black zero” that is so important for the CDU in particular.

Thunderbolt from the Court of Auditors

With this bill, Brigitte Mandt, the President of the North Rhine-Westphalian State Audit Office, made a spectacular dash for black and green. On Friday, Mandt published a special statement in which she confirmed that Optendrenk’s budget plans were unconstitutional in several ways. It is not only the shifting of the five billion from one rescue fund to another that violates the state constitution.

According to the LRH, the same also applies to the fact that Black-Green has exhausted the credit limit of the Corona rescue package, although the money is no longer needed to finance the consequences of the pandemic. Then Mandt let the Minister of Finance know: Credit-financed reserves are fundamentally unconstitutional; what is not needed from the Corona rescue package must flow into the debt repayment.

After Mandt’s thunderbolt, little was heard from the Treasury over the weekend. Optendrenk, previously known as a rock-solid budgetary politician, and his experts worked under high pressure on an at least reasonably face-saving solution. The Court of Auditors can only examine and warn, it cannot impose sanctions on the government.

But the example of Optendrenk’s predecessor Norbert Walter-Borjans (SPD) shows how dangerous the label “unconstitutional” can be for a finance minister. The Constitutional Court certified that he acted unconstitutionally in a total of three Etas. The coup that the CDU and FDP succeeded in early 2011 had very specific, dangerous consequences for the then red-green government: the Constitutional Court partially approved their application for a temporary injunction against the implementation of the supplementary budget.

Optendrenk plays it safe

Since Mandt’s devastating verdict, Optendrenk had to reckon with the fact that the opposition (today the SPD, FDP and AfD) would move to Münster in order to stop the implementation of his “crisis management” rescue package with a temporary injunction. If that were to happen, it would be devastating. “We need clarity and certainty that we can help, we cannot afford procedural skirmishes in the midst of the many crises,” Optendrenk warned on Tuesday.

In order not to take any risks, he now wants to proceed strictly according to the guidelines of the Court of Auditors: What is left of the Corona fund will be used for repayment. In addition, the government has identified an exceptional emergency situation so that the state parliament can grant credit authorizations of five billion euros for the “crisis management” special fund in a supplementary budget in accordance with the constitution. Due to the higher interest rates, the new loans have to be taken out on worse terms than was the case with the funds left over from the Corona fund.

In addition, the “black zero” for 2022 is gone. But already in the 2023 budget, which is also to be passed in December, Optendrenk does not want to go into debt again – at least formally. Because the secondary budget called crisis management must now be financed through loans. North Rhine-Westphalia is allowing itself a repayment period of 50 years for the special fund, which does not fit in with the promise made in the black-green coalition agreement to ensure solid finances that are fair to the generations.

On Tuesday, Finance Minister Optendrenk argued surprisingly routinely with the newly planned instrument, which was not supposed to be used until recently. “The extraordinary emergency is beyond the control of the state government, the situation is caused by external factors – energy crisis and energy price development, inflation, refugee development.” North Rhine-Westphalia is hardest hit by the crisis because its economic structure is made up of energy-intensive companies, such as metalworking or the chemical industry, said Optendrenk, pointing out that according to the November figures from the Munich Ifo Institute, NRW was at the bottom of the economic chart for the federal states with a worrying figure of minus 2.8 percent compared to the previous quarter. “Just a few weeks ago, that wasn’t the case,” said Optendrenk.