Michel: Only use emergency loans to combat crises

The Saxon Court of Audit urges sound economic management even in times of financial uncertainty. President Jens Michel sees the latest ruling by the Federal Constitutional Court as a signpost: "The ruling is not only groundbreaking for the federal government, but also for the federal states when it comes to financially managing future crises. It sends an important signal: emergency loans may only be used to combat a crisis," he told the German Press Agency on Wednesday. The head of the authorities intends to comment in detail on the presentation of the Court of Auditors' report on Thursday.

According to Michel, emergency loans must be used for a specific purpose and for a limited period of time. This is the only way to ensure that taking on debt is compatible with the constitutional ban on new borrowing. "The Saxon Court of Audit repeatedly emphasizes in its annual reports: Only if debt rules are adhered to in normal times can financial leeway be created to be able to act in times of crisis," said the President.

On 15 November, the Federal Constitutional Court prohibited the federal government from reallocating loans of around 60 billion euros originally earmarked for coronavirus measures to climate protection. As a result, numerous projects from the federal government's Climate and Transformation Fund are in question.