Free corona test ends soon: countries must pay

Facing a challenge with the budget for 2023: Minister of Finance Christian Lindner (FDP).
picture alliance / AA | Abdulhamid Hosbas

Minister of Finance Lindner wants to meet the debt brake again in 2023, but after many years of record debt, it will not be easy.

Many federal states, on the other hand, are better off financially – and are backed by the federal government for corona tests or refugee policy.

But there is dissatisfaction: the Budget Committee of the Bundestag wants to transfer less money to the federal states for corona tests.

When Christian Lindner prepares the federal budget, one has to imagine it a bit like Christmas. All houses from the Ministry of Defense to the Ministry of Agriculture present what they want and how much money they want for it.

The Minister of Finance from the FDP cannot fulfill all wishes. Because after the years when Germany took on record debt, in 2023 he will again comply with the debt brake. It will not be easy.

Because Russian President Vladimir Putin is currently shutting down the gas tap, thus increasing pressure on the German economy. With rising energy prices, the economy is threatening to collapse – and thus Lindner’s tax revenues. Rising interest rates also do not make financing easier. In addition, the statutory health insurance needs more money than expected with 17 billion euros.

“The federal government has made itself the paymaster of everything and everyone”

But by no means do all finance ministers have such deep lines of concern as Lindner. His colleagues in the countries should not save so much. In fact, according to the Federal Statistical Office, the federal states generated a surplus of 3.5 billion euros in 2021. At the level below, it looks even better, for the municipalities ended the year with a plus of 4.6 billion euros.

“In recent years, the federal government has made itself the wage earner of everything and everyone,” said Reiner Holznagel, president of the Taxpayers’ Association. The best example of this is the 9 euro ticket, which the federal government has given the regional transport associations 2.5 billion euros for. A regional ticket is hardly within the competence of the federal government.

How the relationship has moved, the taxpayers’ association shows with numbers. According to his calculation, the income of the federal government was always higher than that of the federal states, but this ratio has tipped. By 2022, the federal states will receive 45 billion euros more than the federal government. The federal government also took on most of the corona debt, according to the taxpayers’ association, 359 billion euros or 85 percent of the total 421 billion euros from the years 2020 and 2021.

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From the taxpayers’ association’s point of view, the corona crisis in particular has set in motion a trend reversal. Corona assistance and takeover costs at the test centers were primarily paid for by the federal government. The federal government also took on most of the costs associated with the Ukrainian refugees – although the federal states would actually be responsible. The individual citizen could feel this if the pressure on the federal budget increases and savings are to be made.

At least there is plenty of that development in the Bundestag: Members of Parliament in the Committee on Budgets demand that the federal states pay for the tasks that fall within their responsibility. Specifically, it is about the coronal tests.

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But why does Lindner not just cut the countries’ money? The problem is that the federal states have to approve many laws in the Bundesrat and thus can put pressure on the federal government.

If you ask the state finance ministries, they are – not surprisingly – reluctant. The federal government’s debt brake is more restrictive than the federal government’s, so there is less room for maneuver. The states also point out that the situation in the treasury is very different. In fact, there are some countries that also have a difficult economic situation: Berlin closed 2021 with a deficit of two billion euros, with Saarland it was 80 million euros. In contrast, Hesse generated a profit of 1.1 billion euros, and Baden-Württemberg even 3.6 billion.

How the Federal Treasury Department intends to deal with the states is not yet known. An inquiry from Business Insider left the ministry unanswered.

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