Germany faces fiscal scrutiny over federal and state budgets

The German Federal Court of Auditors (Bundesrechnungshof) has issued criticisms regarding budget management at both the federal and state levels.

For the Federal Ministry of Labour and Social Affairs (BMAS), the court criticized the 2027 budget draft. It identified a mismatch in the use of funds for basic security for job seekers, where administrative costs consistently exceed estimates while funds intended for labor integration remain underutilized. The court noted that these integration funds are being proposed as a reserve to cover deficits in other areas, such as professional German language training, and recommended that budget allocations be made strictly according to specific needs.

At the state level, officials in Saxony-Anhalt are warning of massive financial bottlenecks starting in 2027. The state's debt has risen significantly, reaching approximately 24.9 billion euros. The Court of Auditors president, Kay Barthel, and Finance Minister Michael Richter have emphasized the need for structural reforms, including personnel reductions and spending limits, to address the widening budget gap and the increasing pace of debt accumulation since the introduction of the debt brake.