Under Article 110 of the Basic Law, the federal budget is a plan, the Haushaltsplan, and parliament enacts it as a law. The government may spend only money that parliament has approved in this way. If a new year begins before the budget law is passed, Article 111 applies. The government may then spend only what is needed to keep existing institutions running, to meet legal obligations, and to continue construction and purchases already funded in an earlier budget. This happens regularly in election years, when forming a new government takes time. After the governing coalition broke apart in November 2024, the budget for 2025 could not be passed in time. The Bundesrat approved the budget law for 2025 on 26 September 2025, with retroactive effect from 1 January 2025.
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The Plan Post
In the German civil service, a permanent position is a Planstelle, a plan post. It is a post provided for in the budget plan. Section 49 of the Federal Budget Code is short: Ein Amt darf nur zusammen mit der Einweisung in eine besetzbare Planstelle verliehen werden. (An office may be conferred only together with assignment to an available plan post.) A civil servant who is promoted can be placed in the new plan post with retroactive effect of at most three months.
The Start-Up Grant
Unemployed people in Germany who start a full-time business can apply for the Gründungszuschuss, a start-up grant paid for up to 15 months. Under Section 93 of the Third Book of the Social Code, they must present a statement from an expert body on the Tragfähigkeit, the viability, of the business. A chamber of commerce, a chamber of crafts or a tax adviser can give it. The founder hands the expert body a set of documents. The Federal Employment Agency’s model letter lists them: a business plan, a plan of capital needs and financing, a forecast of sales and profitability, a CV and proof of qualifications. Whether the grant is paid is at the agency’s discretion.
Subject to Funding
In their coalition agreement of 2025, CDU, CSU and SPD promised to lower the electricity tax für alle so schnell wie möglich auf das europäische Mindestmaß, for everyone as quickly as possible to the European minimum. In the summer of 2025, the cabinet decided to lower it only for industry and agriculture. In early July, the coalition committee confirmed the decision. Households and small businesses got no cut. The German Retail Federation and the wholesale federation BGA called the decision a Wortbruch, a breaking of one’s word. Chancellor Friedrich Merz answered: Wir können nur das Geld ausgeben, das wir haben. We can only spend the money we have. He pointed to a condition in the agreement. All plans in the coalition agreement are subject to funding.
Payments Since 1803
Every year, the German states pay money to the churches. These Staatsleistungen, state payments, go back mainly to 1803. In that year, church property was given to secular rulers, and the new rulers took over the church’s obligations. In 1919, the Weimar Constitution ordered that the payments be durch die Landesgesetzgebung abgelöst, bought out by state law. It added: Die Grundsätze hierfür stellt das Reich auf. The Reich sets the principles for this. The Basic Law of 1949 took this article over. The principles have never been set, and so the payments continue. For 2022, the states planned about 602 million euros for the Catholic and Protestant churches alone.
Ablösen in this legal sense means to end against compensation. The payments can stop only against compensation, and in more than a century no federal law has set the terms.
Beyond Amendment
The German Basic Law can be changed only openly. Article 79 requires a law das den Wortlaut des Grundgesetzes ausdrücklich ändert oder ergänzt, that expressly changes or adds to its wording. Such a law needs two thirds of the members of the Bundestag and two thirds of the votes of the Bundesrat. Some parts are closed even to that majority. Paragraph 3, the Ewigkeitsklausel or eternity clause, makes an amendment unzulässig, not permitted, if it touches the division of the federation into states, the basic participation of the states in making laws, or the principles laid down in Articles 1 and 20.
Prices for Public Contracts
Since 21 November 1953, a federal regulation has governed the prices of public contracts in Germany. It is called Verordnung PR Nr. 30/53. Its first rule is that market prices come first. Where no market price can be established, or where competition among suppliers is restricted, the state and the supplier may agree a cost-based price, a Selbstkostenpreis. Such a price must be based on the supplier’s appropriate costs. An annex sets out how to find them, the Leitsätze für die Preisermittlung auf Grund von Selbstkosten. Its chapters list the parts of the price one by one: materials, wages and other personnel costs, depreciation, interest, risks, and finally a calculated profit. The price authorities of the states may audit the price and inspect the supplier’s documents. A revised version took effect on 1 April 2022.
Fees That May Not Exceed Costs
German towns charge their residents fees for water, wastewater and waste collection. These fees are calculated, and the law limits the result. The municipal levies law of North Rhine-Westphalia says the expected fee revenue should not exceed the expected costs of the facility. The costs are those that may be counted under business accounting principles. If a town collects more than its costs, it must offset the surplus in the fees of the following years. Kostenüberdeckungen am Ende eines Kalkulationszeitraumes sind innerhalb der nächsten vier Jahre auszugleichen. A surplus at the end of a calculation period must be balanced within the next four years. The principle is called the Kostendeckungsprinzip, the cost-coverage principle.
The Longest Government Formation
Germany elected a new Bundestag on 24 September 2017. CDU, CSU, FDP and the Greens then held exploratory talks, Sondierungsgespräche, for about four weeks. On 19 November 2017, the FDP ended them. CDU, CSU and SPD then held their own exploratory talks. They finished them on 12 January 2018 with a 28-page paper. On 7 February 2018 they agreed on a coalition agreement. The SPD put it to a vote of its members, and 66.02 percent of those who voted approved. On 14 March 2018 the Bundestag elected Angela Merkel chancellor for the fourth time. The Bundestag counted 171 days since the election, a new record. The previous record was 86 days, in 2013.
Twenty-Four Hours to Comment
Before the federal government sends a bill to the Bundestag, the ministry asks associations for their opinion. This is the Verbändeanhörung. The rules of procedure of the federal ministries require that associations be involved in good time, but they leave the length of the deadline to the ministry. In August 2023, the Chancellery gave associations a little more than 24 hours to comment on an 88-page draft of the law on the foreign intelligence service. Reporters Without Borders called it ein Trauerspiel, a sad spectacle. The critics asked for Gründlichkeit vor Schnelligkeit, thoroughness before speed. A paper published by the association Mehr Demokratie in May 2024 looked at 496 bills. The average deadline was 15.4 working days. The authors proposed at least four weeks.