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Federal budget trends up to and including February 2022
Table: Trends in the federal budget
Expenditure (€bn)²
556.6
79.8
Year-on-year change in % (year to date)
-11.0
Revenue (€bn)³
341.0
51.1
Year-on-year change in % (year to date)
35.5
Tax revenue (€bn)
313.5
47.7
Year-on-year change in % (year to date)
37.2
Balance of pass-through funds (€bn)
0.0
0.0
Fiscal balance (€bn)
-215.6
-28.7
Financing/use of surplus:
215.6
28.7
Cash resources (€bn)
-
22.7
Seigniorage (€bn)
0.2
0.0
Movements in reserves⁴ (€bn)
0
0.0
Net borrowing⁵ (€bn)
215.4
6.1
Any discrepancies in totals are due to rounding.
¹ As per accounts.
² With the exception of expenditure on the repayment of debt incurred on the credit market, allocations to reserves and expenditure made to cover a cash deficit. Excluding expenditure from internal offsetting.
³ With the exception of revenue from loans on the credit market, withdrawals from reserves, revenue from cash surpluses and seigniorage. Excluding revenue from internal offsetting.
⁴ Negative values denote accumulation of reserves.
⁵ (-) debt repayment; (+) borrowing
Source: Federal Ministry of Finance
Actual 2021
Actual¹
January–February 2022
Until the 2022 budget has been adopted by the German Bundestag and promulgated in the Federal Law Gazette, the German government is working on the basis of an interim budget, which is based primarily on Article 111 of the Basic Law (see the article “Vorläufige Haushaltsführung 2022” (“2022 Interim Budget Management”) in the German version of the January 2022 monthly report). Given that the targets for the 2022 federal budget have not been determined, no target values are included in the following tables.
Federal revenue in the first two months of 2022 totalled approximately €51.1bn, up by 35.5% (about €13.4bn) on the year. Tax receipts (taking into account transfers of own resources to the EU) increased by 37.2% (roughly €12.9bn) on the year. The yield from value added taxes was up by 44.9% (approximately €7.7bn) on the year. Revenue from income tax and corporation tax rose by 9.8% (about €1.7bn). Receipts from the solidarity surcharge declined by 34.9% (roughly €0.6bn). Payments to the EU (GNI-based own resources and VAT-based own resources) were down by about €3.8bn on the year, which also contributed to the increase in tax revenue.
Other revenue recorded a year-on-year rise of 15.7% (approximately €0.5bn), which can be attributed primarily to higher revenue from EU Structural Fund contributions.
Federal expenditure in the first two months of 2022 totalled approximately €79.8bn, 11.0% (about €9.9bn) lower than in the same period last year. A breakdown by economic category shows that the lower spending is primarily the result of a drop in consumption spending, which was down by 7.2% (about €5.7bn). Ongoing grants to social security funds declined by 6.0% (approximately €2.3bn). The baseline was affected by a one-off €3.0bn disbursement to the health fund’s liquidity reserves that was made in January 2021 for a programme to future-proof hospitals. Subsidies to businesses fell by 43.0% (about €4.5bn) on the year. Assistance to businesses affected by the fallout from the coronavirus pandemic amounted to roughly €1.5bn in the first two months of 2022, compared with approximately €6.2bn in the same period last year.
Investment spending totalled about €5.3bn in the first two months of 2022, down by 43.8% (roughly €4.2bn) on the year. This can be attributed primarily to a €3.5bn year-on-year decline in liquidity assistance provided to the Federal Employment Agency. At the end of the 2021 budget year, the assistance granted over the course of the year that was not repaid by the end of the budget year was converted into a subsidy for the Federal Employment Agency. Fixed asset investment was approximately €0.1bn below last year’s level.
The federal budget recorded a deficit of approximately €28.7bn for the January–February 2022 period.
Revenue and expenditure are subject to strong fluctuations over the course of the fiscal year and thus have an uneven effect on cash funds in individual months. Net borrowing also tends to fluctuate considerably over the course of the year. This means that the fiscal balance at any given point in the year and the corresponding net borrowing figures are not reliable indicators of the end-of-year figures for the fiscal balance and net borrowing. This is especially true towards the start of the year. It should also be borne in mind that an interim budget is currently in place.
Trends in federal expenditure by function
Trends in federal expenditure by function
General public services
100,399
18.0
14,292
15,166
+6.1
Economic cooperation and development
13,224
2.4
1,517
1,480
-2.4
Defence
46,550
8.4
6,712
7,106
+5.9
Government, central administration
20,576
3.7
3,472
3,628
+4.5
Revenue administration
5,981
1.1
883
948
+7.3
Education, science, research, cultural affairs
28,985
5.2
2,504
2,389
-4.6
Support for school and university students and training programme participants
4,912
0.9
784
761
-3.0
Science, research and development outside of higher education institutions
16,259
2.9
1,193
830
-30.4
Social security, family affairs and youth, labour market policy
281,133
50.5
60,304
49,760
-17.5
Social security funds including unemployment insurance
147,057
26.4
37,034
30,912
-16.5
of which:
General pension insurance
97,343
17.5
22,930
23,342
+1.8
Health insurance
18,887
3.4
5,512
2,551
-53.7
Unemployment insurance
16,935
3.0
5,413
1,931
-64.3
Labour market policy
42,109
7.6
6,860
6,491
-5.4
of which:
Basic income support for jobseekers under Book II of the Social Code
21,748
3.9
3,746
3,536
-5.6
Government housing and heating allowances under Book II of the Social Code
10,090
1.8
1,775
1,550
-12.7
Family assistance, welfare services, etc.
11,038
2.0
1,775
1,851
+4.2
Social benefits for the consequences of war and political events
2,159
0.4
481
435
-9.6
Other social affairs
67,506
12.1
12,102
7,772
-35.8
Health, environment, sport, recreation
16,959
3.0
3,548
4,206
+18.5
Housing, urban development, regional planning and local community services
2,270
0.4
128
150
+16.4
Housing, home ownership savings premium
1,320
0.2
112
142
+27.0
Food, agriculture and forestry
1,953
0.4
110
118
+6.7
Energy and water management, trade and services
5,705
1.0
984
1,012
+2.9
Regional support measures
1,796
0.3
72
117
+61.9
Mining, manufacturing and construction
801
0.1
309
305
-1.3
Transport and communication
29,781
5.4
2,581
2,563
-0.7
Roads
8,451
1.5
368
617
+67.4
Railways and public transport
14,139
2.5
949
1,056
+11.2
Financial management
89,432
16.1
5,244
4,433
-15.5
Real property and capital assets, special funds and financial grants
84,467
15.2
703
728
+3.7
Interest expenditure and borrowing-related expenditure
3,881
0.7
4,190
3,322
-20.7
Total expenditure¹
556,617
100.0
89,695
79,796
-11.0
¹ With the exception of expenditure on the repayment of debt incurred on the credit market, allocations to reserves and expenditure made to cover a cash deficit. Excluding expenditure from internal offsetting. Source: Federal Ministry of Finance
Trends in federal expenditure by economic category
Trends in federal expenditure by economic category
Consumption expenditure
510,835
91.8
80,203
74,462
-7.2
Human resources expenditure
36,498
6.6
6,987
7,264
+4.0
Salary payments
27,237
4.9
5,090
5,269
+3.5
Pensions
9,261
1.7
1,897
1,995
+5.2
Operating expenditure
38,670
6.9
4,016
4,370
+8.8
Maintenance of immovable property
1,083
0.2
105
115
+9.5
Military procurement
17,068
3.1
1,330
1,356
+2.0
Other
20,518
3.7
2,581
2,898
+12.3
Interest expenditure
3,855
0.7
4,189
3,321
-20.7
Ongoing grants and subsidies
427,989
76.9
64,633
59,178
-8.4
to public administrations
117,438
21.1
7,203
7,665
+6.4
to other areas
310,551
55.8
57,430
51,513
-10.3
of which:
Companies
83,683
15.0
10,449
5,959
-43.0
Pensions, benefits, etc.
32,557
5.8
5,590
5,479
-2.0
Social security funds
172,478
31.0
38,400
36,086
-6.0
Other asset transfers
3,824
0.7
378
329
-13.0
Investment expenditure
45,782
8.2
9,492
5,334
-43.8
Financial assistance
39,321
7.1
8,933
4,904
-45.1
Grants and subsidies
33,788
6.1
2,722
2,484
-8.7
Loans, guarantees
2,363
0.4
5,911
2,420
-59.1
Acquisition of holdings; capital contributions
3,170
0.6
300
0
-100.0
Fixed asset investment
6,461
1.2
559
429
-23.3
Construction projects
3,920
0.7
290
203
-30.0
Acquisition of movable assets
2,453
0.4
266
225
-15.4
Acquisition of real property
88
0.0
4
1
-75.0
General reduction/increase in expenditure
0
0.0
0
0
X
Total expenditure¹
556,617
100.0
89,695
79,796
-11.0
¹ With the exception of expenditure on the repayment of debt incurred on the credit market, allocations to reserves and expenditure made to cover a cash deficit. Excluding expenditure from internal offsetting.
Source: Federal Ministry of Finance
Income tax and corporation tax
(incl. final withholding tax on interest and capital gains)
162,587
47.7
17,099
18,780
+9.8
of which:
Wages tax
92,671
27.2
12,566
14,097
+12.2
Assessed income tax
30,746
9.0
1,012
1,451
+43.4
Non-assessed tax on earnings
13,695
4.0
1,156
1,388
+20.1
Final withholding tax on interest and capital gains
4,413
1.3
1,055
888
-15.8
Corporation tax
21,062
6.2
1,311
957
-27.0
Value added taxes
113,126
33.2
17,241
24,988
+44.9
Trade tax apportionment paid to Federation and Länder
2,082
0.6
135
254
+88.1
Energy duty
37,120
10.9
1,840
1,905
+3.5
Tobacco duty
14,733
4.3
1,463
1,286
-12.1
Solidarity surcharge
11,028
3.2
1,787
1,164
-34.9
Insurance tax
14,980
4.4
5,910
6,189
+4.7
Electricity duty
6,691
2.0
997
1,133
+13.6
Motor vehicle tax
9,546
2.8
1,671
1,647
-1.4
Alcohol duty including alcopops duty
2,084
0.6
274
401
+46.4
Coffee duty
1,058
0.3
162
168
+3.7
Aviation tax
566
0.2
39
101
+159.0
Sparkling wine duty and intermediate products duty
363
0.1
61
79
+29.5
Other taxes accruing to the Federation
2
0.0
0
1
X
Deductions
Consolidation assistance for the Länder
800
X
0
0
+0.0
Supplementary grants to Länder
10,071
X
0
0
+0.0
EU own resources (GNI-based)
28,683
X
8,897
5,491
-38.3
EU own resources (VAT-based)
4,416
X
1,256
908
-27.7
Grants to Länder for public transport
9,458
X
1,545
1,786
+15.6
Grants to Länder for motor vehicle tax and HGV toll
8,992
X
2,248
2,248
+0.0
Other revenue
27,472
8.1
2,931
3,392
+15.7
Revenue from economic activity
5,342
1.6
35
45
+28.6
Interest revenue
346
0.1
47
91
+93.6
Loan repayments, holdings, privatisation proceeds
1,304
0.4
111
121
+9.0
Total revenue¹
341,017
100.0
37,666
51,053
+35.5
¹ With the exception of revenue from loans on the credit market, withdrawals from reserves, revenue from cash surpluses and seigniorage. Excluding revenue from internal offsetting.
Source: Federal Ministry of Finance
2022 trends in tax revenue (excluding local authority taxes)
2022 trends in tax revenue (excluding local authority taxes)¹
Joint taxes
Wages tax²
18,266
8.3
38,211
9.5
230,800
5.7
Assessed income tax
1,400
82.4
3,420
43.5
65,050
-10.1
Non-assessed taxes on earnings
984
39.6
2,821
21.0
23,450
-14.4
Final withholding tax on interest and capital gains
(including the former withholding tax on interest income)
1,091
-22.6
2,017
-15.8
8,300
-17.2
Corporation tax
296
-73.1
1,799
-31.4
38,950
-7.5
Value added taxes
27,723
30.2
51,246
37.8
270,750
8.0
Trade tax apportionment paid to Federation and Länder
340
80.2
610
153.0
5,005
1.1
Increased trade tax apportionment
0
-53.8
0
X
0
X
Total joint taxes
50,101
18.4
100,125
22.0
642,305
2.6
Taxes accruing to the Federation
Energy duty
1,514
0.4
1,905
3.5
38,450
3.6
Tobacco duty
748
-13.6
1,286
-12.1
15,420
4.7
Alcohol duty
223
-2.8
401
46.2
2,130
2.0
Insurance tax
5,371
6.0
6,189
4.7
15,350
2.5
Electricity duty
505
22.5
1,133
13.6
6,670
-0.3
Motor vehicle tax
764
-5.4
1,647
-1.5
9,520
-0.3
Aviation tax
39
34.9
101
159.4
1,140
101.5
Solidarity surcharge
498
-3.1
1,164
-34.9
10,400
-5.7
Other taxes accruing to the Federation
119
0.0
248
11.0
1,449
2.2
Total taxes accruing to the Federation
9,781
2.4
14,073
-0.9
100,529
2.4
Taxes accruing to the Länder
Inheritance tax
813
22.4
1,714
33.1
9,350
-4.8
Real property transfer tax
1,616
5.9
3,204
8.3
18,550
1.2
Betting and lottery tax
229
30.1
487
29.4
2,535
8.7
Beer duty
38
-12.6
86
3.1
618
5.8
Other taxes accruing to the Länder
35
1.5
62
5.3
548
2.1
Total taxes accruing to the Länder
2,731
11.7
5,553
16.6
31,601
0.0
EU own resources
Customs duties
550
59.5
972
46.8
5,150
0.5
VAT-based own resources
513
-33.8
908
-27.7
4,740
7.3
GNI-based own resources
3,103
-43.5
5,491
-38.3
30,340
5.8
Total EU own resources
4,166
-37.0
7,371
-31.8
41,620
8.9
Federation³
27,003
34.2
48,934
35.1
328,364
4.7
Länder³
28,160
15.5
56,507
19.2
356,423
0.4
EU
4,166
-37.0
7,371
-31.8
41,620
8.9
Local authorities’ share of income tax and value added tax
3,834
8.1
7,910
9.3
53,178
-1.5
Total tax revenue (excluding local authority taxes)
63,163
15.5
120,722
18.7
779,585
2.4
¹ Methodology: Total cash income from the various taxes is recorded and allocated to the various government levels as stipulated by law. Tax amounts actually received in the current month by individual government levels may differ from the target amounts for technical reasons.
² After deduction of child benefit refunds by the Federal Central Tax Office.
³ After supplementary grants; any discrepancies with the table on trends in federal revenue are due to the methodology used (see footnote 1).
⁴ Results of the Working Party on Tax Revenue Estimates of November 2021.
Source: Federal Ministry of Finance
Total tax revenue (excluding local authority taxes) was up by 15.5% on the year in February 2022. This is primarily a result of the 18.4% year-on-year rise in revenue from joint taxes. Revenue from value added taxes posted particularly strong growth. However, this is mainly attributable to the low 2021 baseline, which was a result of (a) the temporary cut in VAT rates in the second half of 2020 and (b) the option of a reduction in special prepayments. Wages tax, assessed income tax and non-assessed taxes on earnings also posted significant year-on-year revenue growth. Receipts from federal taxes in February 2022 rose by 2.4% on the year, while receipts from taxes accruing to the Länder rose by 11.7%.
Transfers of own resources to the EU, including customs duties, were down by approximately €2.4bn (37.0%) on the year in February 2022. In general, monthly requisitions are based on the annual EU budget that is in force for the respective year and are distributed relatively evenly across individual months, although requisitions tend to be higher early in the year based on the EU’s financing needs. This effect was less marked in February 2022 than in February last year. Because this year’s annual budget is similar to last year’s budget in terms of volume, requisitions in later months can in turn be expected to be somewhat higher than in the equivalent months of 2021.
In the first two months of 2022, total tax receipts were up by 18.7% on the year. Revenue from joint taxes rose by 22.0%, while receipts from taxes accruing solely to the Federation declined by 0.9%. Revenue from taxes accruing solely to the Länder grew by 16.6%.
Distribution among the Federation, Länder and local authorities
The Federation’s tax receipts (after accounting for supplementary federal grants to the Länder) were up by 34.2% on the year in February 2022. The discrepancy between this figure and the rise in total tax receipts (excluding local authority taxes) is largely due to the significantly lower federal transfers of EU own resources (see above). The Federation’s take from joint taxes grew by 21.4%. This was higher than the 18.4% increase in overall revenue from joint taxes due to the fact that, once again, VAT revenue shifted in the Federation’s favour, although this effect is only moderate at this point (see the article on tax revenue in January 2022 in the February issue of the Federal Finance Ministry’s monthly report). Other trends in February 2022: revenue from taxes accruing solely to the Federation was up by 2.4% on the year. However, supplementary federal grants to the Länder and federal subsidies to the Länder for public transport recorded year-on-year increases.
Länder tax receipts posted a strong year-on-year gain of 15.5% in February 2022. Total Länder revenue from joint taxes increased noticeably (by 17.2%), especially revenue from value added taxes (up by 27.3%). Moreover, the yield from taxes that accrue exclusively to the Länder posted significant growth of 11.7%. Mirroring the higher payments made by the Federation, the Länder saw an increase in receipts from supplementary federal grants (up by 4.0%) and from federal subsidies for public transport (up by 9.0%).
Local authorities’ take from their share of joint taxes was 8.1% higher than in the same period last year. Local authorities’ receipts from value added taxes were up by 3.0% on the year.
Gross revenue from wages tax was up by 7.0% in year-on-year terms in February 2022. This upward trend primarily reflects the marked improvement in labour market conditions compared with February 2021, especially the significant decline in short-time working. Child benefit payments – which are financed from wages tax receipts – declined by 0.7% on the year. Overall, cash receipts from wages tax posted a year-on-year gain of 8.3% in February 2022. In cumulative terms, cash receipts from wages tax were up by 9.5% on the year in the first two months of 2022.
Gross receipts from corporation tax fell by €0.8bn (72.5%) on the year in February 2022. Year-on-year tax revenue fluctuations of this kind are common. Research and investment allowances were financed from this amount. On balance, these payments totalled approximately €6.5m and thus had only a minimal impact on cash receipts from corporation tax. Total cash receipts from corporation tax were down by €0.8bn (73.1%) on the year in February 2022. In cumulative terms, cash receipts from corporation tax fell by €0.8bn (31.4%) on the year in the first two months of 2022.
Gross receipts from assessed income tax rose by 42.7% on the year in February 2022. Here, too, revenue was mainly generated from assessment activities. Significant year-on-year fluctuations are not unusual. Employee refunds (which are subtracted from the gross figure) were down by 9.0% on the year. Investment allowance payments, research allowance payments and owner-occupied homes premiums, which are insignificant in terms of amount, are also subtracted from the gross figure. On balance, cash receipts from assessed income tax were up by 82.4% on the year in February 2022. In cumulative terms, cash receipts from assessed income tax were up by 43.5% on the year in the first two months of 2022.
Gross receipts from non-assessed taxes on earnings recorded a 35.9% year-on-year rise in February 2022. Refunds by the Federal Central Tax Office, which are financed from gross revenue, totalled about €75m (up by 1.0% on the year). Overall, cash receipts from non-assessed taxes on earnings were up by 39.6% in February 2022 compared with the same month last year. Cumulatively, cash receipts from non-assessed taxes on earnings were up by 21.0% on the year in the first two months of 2022.
Final withholding tax on interest and capital gains
In February 2022, revenue from final withholding tax on interest and capital gains was 22.6% lower than in the same month last year. Taken cumulatively, cash receipts from final withholding tax on interest and capital gains were down by 15.8% on the year in the first two months of 2022.
Revenue from value added taxes was up by 30.2% on the year in February 2022. Receipts from domestic VAT grew by 26.9% on the year. Receipts from import VAT were up by 66.5%. As a result of the long-term extensions for filing VAT returns and paying VAT, cash receipts from domestic VAT in the month of February are, in general, significantly impacted by revenue from the previous December. It is therefore worth noting that cash receipts from value added taxes were low in February 2021 due to the temporary cut in VAT rates in the second half of 2020, which affected the December 2020 figure. Moreover, businesses affected by the Covid-19 pandemic were able to lower their special VAT prepayments in February 2021, which further reduced the baseline figure. Furthermore, import VAT revenue was negatively impacted to varying degrees in both Feb 2022 and Feb 2021 because the deadline for remitting tax to the authorities is the 26th of each month; this means that, in February, part of the revenue is not recorded until the following month due to the time needed for processing. Moreover, the year-on-year VAT revenue trends also reflect the marked economic recovery that occurred over the course of 2021. Cumulatively, cash receipts from value added taxes were up by 37.8% on the year in the first two months of 2022.
In February 2022, revenue from taxes accruing solely to the Federation was up by 2.4% compared with the same month last year. Revenue from the solidarity surcharge was down by 3.1% on the year. Revenue losses were also recorded for tobacco duty (down by 13.6%), motor vehicle tax (down by 5.4%) and alcohol duty (down by 2.8%). Other taxes posted year-on-year revenue gains, some of them significant: electricity duty (up by 22.5%), energy duty (up by 0.4%), insurance tax (up by 6.0%) and aviation tax (up by 34.9%). In the case of electricity duty and aviation tax, this can be attributed primarily to a relatively low baseline figure for 2021. Trends in revenue from other taxes had only a minor impact on overall receipts from federal taxes.
Receipts from taxes accruing solely to the Länder were up by 11.7% on the year in February 2022. Taxes recording revenue gains included real property transfer tax (up by 5.9%), inheritance tax (up by 22.4%), fire protection tax (up by 1.5%) and betting and lottery tax (up by 30.1%). The increase in receipts from betting and lottery tax was mainly due to proceeds from the new online poker tax and virtual slots tax, which have been levied since 1 July 2021. Receipts from beer duty fell by 12.6% on the year.
Borrowing trends for the Federation (budget and special funds, excluding loan financing) in February 2022
Borrowing trends for the Federation (budget and special funds, excluding loan financing) in February 2022
in €m
Total
1,356,287
30,504
-22,719
1,364,071
7,785
-104
broken down by purpose
Federal budget
1,314,763
30,404
-22,719
1,322,448
7,685
-104
Financial Market Stabilisation Fund (loans for expenses pursuant to section 9 (1) of the Stabilisation Fund Act (Stabilisierungsfondsgesetz))
22,734
-
-
22,734
-
-
Investment and Redemption Fund
16,111
-
-
16,111
-
-
Economic Stabilisation Fund (loans for recapitalisation measures pursuant to section 22 of the Stabilisation Fund Act)
2,679
100
-
2,779
100
-
broken down by debt type
Conventional federal securities
1,257,524
29,636
-22,644
1,264,516
6,992
-349
30-year federal bonds
279,622
2,923
-
282,545
2,923
733
10-year federal bonds
578,934
5,580
-
584,514
5,580
-1,248
Federal notes
162,983
2,880
-
165,863
2,880
-1
Federal Treasury notes
83,999
6,171
-
90,170
6,171
55
Treasury discount papers issued by the Federation
151,986
12,081
-22,644
141,424
-10,562
112
Inflation-linked federal securities
66,074
868
-
66,942
868
266
Green federal securities
22,520
-
-
22,520
-
-
Securitised loans
5,695
-
-75
5,620
-75
-20
Other loans and ordinary debts
4,474
-
-
4,474
-
-
Additional information
Liabilities from the indexing of inflation-linked federal securities
7,099
7,507
408
-
Reserves in accordance with the Final Payment Financing Act (Schlusszahlungsfinanzierungsgesetz)
4,350
4,390
41
-
Liabilities resulting from indexing include the amount by which the original issuance price has increased due to inflation between the start date and the specified reference date.
In contrast, reserves include only the increases that are noted on coupon payment dates (15 April of every year) (section 4 (1) of the Final Payment Financing Act) and on reopening dates for inflation-linked securities (section 4 (2) of the Final Payment Financing Act).
Borrowing trends for the Federation (loan financing) in February 2022
Borrowing trends for the Federation (loan financing) in February 2022
in €m
Total
91,156
1,750
-
92,906
1,750
-23
broken down by purpose
Financial Market Stabilisation Fund (loans for resolution authorities pursuant to section 9 (5) of the Stabilisation Fund Act)
56,750
1,750
-
58,500
1,750
-23
Economic Stabilisation Fund (loans for KfW pursuant to section 23 of the Stabilisation Fund Act)
34,406
-
-
34,406
-
-
Any discrepancies in totals are due to rounding.
Under section 9 (5) of the Stabilisation Fund Act, the Federal Ministry of Finance is empowered to borrow up to €60bn for the Financial Market Stabilisation Fund so that the Fund can grant loans to resolution authorities for the purpose of refinancing (as per section 8 (10) of the Stabilisation Fund Act) assets that they have taken over.
Such borrowing is neutral overall in terms of debt, because it replaces the funds that resolution authorities would otherwise have to borrow on the market. However, it does increase the debt level in federal securities.
Under section 24 (1) in conjunction with section 23 of the Stabilisation Fund Act, the Federal Ministry of Finance is authorised to borrow up to €100bn for the Economic Stabilisation Fund for the purpose of granting loans. Under section 23 of the Stabilisation Fund Act, the Economic Stabilisation Fund can grant loans to KfW for the purpose of refinancing the special programmes assigned to it by the federal government in response to the coronavirus crisis.
