German Constitutional Court invalidates 2018 law that increased state funding for political parties by 15%

The Constitutional Court of Germany ruled that the 15% increase of overall state funding for political parties decided by politicians in 2018 was unconstitutional.

Germany Federal Constitutional Court
Germany Federal Constitutional Court │ © Federal Constitutional Court

The Federal Constitutional Court of Germany ruled on January 24 that the increase in state funding of political parties voted in 2018 is unconstitutional.

The law passed by lawmakers from the Christian Democratic Union and the Social Democratic Party increased state funds for the financing of political parties by almost 25 million euros (+15%), to an annual total of state funds to share between parties of 190 million euros (207 million dollars). Parts of the reasons given by Bundestag members were that digitalization of communication – hackers, fake news and data protection – increased costs for political parties.

But the Second Senate of the Federal Constitutional Court based in Karlsruhe considered the law void and incompatible with German’s constitutional requirements for state financing of political parties.

It violates the principle that political parties be sufficiently free from state interference,” the court explained in a press release, and lawmakers didn’t “sufficiently substantiate” that the parties could not meet their needs by their own funds.

German political parties have been receiving financing from the state since 1994. Distribution of state funds is determined based upon the election results, the contributions of its members and the funds that each party is able to raise on its own.

State financing cannot exceed a relative limit, i.e. the amount of funding a party is able to raise on an annual basis on its own, so that political parties don’t primarily depend on state funds. The total amount of state financing payable to all parties combined is called the absolute limit. Since 2013, the total amount was linked to a price index. It was set at 205 million euros last year after a 2.5 percent raise.

But in 2018, it should have reached a maximum of 165 million euros approximately. And in July 2018, the absolute limit for state financing to be set in the year 2019 was increased to 190 million euros by lawmakers (+15%). The bill was approved in only 10 days.

In September 2018, 216 members of parliament from the Green party, the Free Democratic Party and the Left Party, all parts of the opposition at the time, challenged the provision that they considered disproportionate, arguing political parties should be sufficiently free from state interference.

The highest German court agreed that digitalization of communications can increase costs for political parties and constitute a decisive change in circumstances for justifying an increase in funding. However, expected costs associated with them have remained unclear to determine the amount of the increase. Furthermore, potential savings from digitalization offsetting the higher costs have not been considered.

The court rebukes other grounds made by the legislator for supporting such a dramatic raise like the stricter transparency and accountability obligations for political parties, higher costs of campaign posters, or the decrease in the number of volunteers, which are internal issues.

As a consequence, “the legislator has not explained how the increase in the absolute limit is restricted to the required amount necessary to cover the increased financial need due to changed circumstances and to keep state financing of political parties limited to maintaining the proper functioning of the political party system.”

The old limit of 165 million euros in 2018 will apply retroactively.

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