FEDERAL SPENDING PLANNING IN GERMANY: MAIN STRUCTURAL CHANGES

Abstract

The article examines changes in the structure of the expenditure part of the German federal budget. Data on the execution of annual budgets in 2017–2021 and of a five-year financial plan for 2022–2026 are analysed. Comparison of structures is carried out according to a cross-classification that combines a functional classification (divided into ten sections in accordance with the classification of the International Monetary Fund) and an economic classification (divided into two sections – current and capital expenditures). The author identifies the areas with a key role in the spending hierarchy, highlights the main factors of the expected dynamics in the next five years, and also considers the features of three periods (2017–2019, 2020–2021 and 2022–2026) in terms of speed and contradictoriness of the structural changes that have taken place and are planned. Based on the analysis, the article concludes that there have been significant and rapid structural changes that have taken place during the pandemic, and that the most important «pre-Covid» indicators (primarily an increase in the share of current expenses on social protection) are planned to be restored. This restoration, however, may be hindered by the implementation of a large-scale «protective umbrella for the economy» – a set of measures developed, but not yet included in the financial plan, to support the German industry, which suffered from a jump in gas prices