Court of Auditors warns of overburdening state finances

According to a media report, the Federal Court of Auditors has warned that state finances will be overburdened in view of the sharp increase in expenditure. "The financial leeway to be able to cushion unforeseen events has noticeably reduced," quoted the "Bild" newspaper on Wednesday from a report by the Federal Audit Office. "In the coming decades, demographics-related expenditure will increase significantly and thus become a growing challenge for the sustainability of public finances."

According to the report, the Court of Auditors warns that the Federal Government's ability to act is already limited. A large part of the household, around 90 percent, is “petrified” – i.e. firmly planned.

In the future, the scope for the federal government will shrink drastically: "As petrification progresses, the danger increases that the state will lose its ability to act and may no longer be able to cope with future challenges or even severe exogenous shocks," according to "Bild" in the report.

In particular, the Court of Auditors called for compliance with the debt rule. "Compliance with it is essential for the long-term sustainability of public budgets." The continuation and compliance with the debt rule is not an end in itself, but serves essential goals for the state's ability to act.