The State Constitutional Court of Bremen has declared the city-state’s budgetary laws for 2023 and 2024 unconstitutional, raising serious questions about fiscal governance and the justification of emergency spending during times of crisis. The unanimous ruling, issued Thursday, found that the laws violated the enshrined debt brake, failing to meet the constitutional requirements for justifying significant impacts on the state’s financial stability.
While the court acknowledged the extraordinary circumstances presented by the climate crisis, the COVID-19 pandemic and Russia’s invasion of Ukraine – circumstances intended to provide temporary exemptions from budgetary constraints – it criticized the legislature for failing to adequately demonstrate the necessity of resorting to emergency borrowing. Crucially, the court determined that a demonstrable and logical connection was lacking between the declared crises and the financial measures undertaken.
The ruling specifically highlighted the legislature’s failure to convincingly link the justification for using emergency loans to support public transportation and the Health Nord hospital network. This deficiency, according to the court, undermines the principle that extraordinary measures should be proportionate and directly responsive to the crises they are intended to address.
Despite overturning the budgetary laws, the court stipulated that obligations to reverse already disbursed funds do not immediately arise from its decision. However, the ruling sends a powerful message to policymakers, demanding greater scrutiny and transparency in the justification of off-budget spending, particularly when invoking exceptional circumstances to bypass budgetary restrictions. The decision, designated St 6/23 and St 3/24, promises to trigger a wider debate regarding the balancing act between prudent fiscal management and the need for robust responses to national and global emergencies and will likely invite similar challenges to budgetary decisions in other German states.