Germany is one of the most influential countries in Western and Central Europe, a major economic power. The state spreads over an area of 357.5 thousand km 2. The number of inhabitants is 82 million people. The capital of the country is the city of Berlin. Previously, it was divided into Eastern and Western parts, but then was merged into one. Residents speak German. The country's economy is one of the most advanced in the world, and the budget structure of Germany is quite balanced.
Natural conditions
The country stretches from north to south - from the coasts of the Baltic and North Seas to the Alps mountain system, some of which belong to Germany. The largest river is the Rhine.
The climate in Germany is moderately mild, slightly continental, with cool and rather snowy or rainy winters and warm summers. The weather is often changeable, including in summer: warm and sunny can quickly be replaced by cold and rainy. The country is in the zone of increased climate warming. Previously, winters were colder than now; summer is gradually becoming hotter. All this ambiguously affects the economy, which, of course, affects the budget - Germany is one of the initiators of the fight against climate change and tries to direct its economy towards greater energy efficiency, change the structure of energy, transport, etc.
Economy
Germany’s GDP is several trillion dollars a year, which is a huge amount for such a small state. The standard of living of the population is high, despite the lack of large reserves of natural resources. The country is forced to purchase hydrocarbons. The most convenient option for Germany is to receive gas through a gas pipeline from Russia. Unlike Poland and a number of other EU countries, Germany prefers its economic interests to the detriment of its political interests and continues to lobby for the construction of gas pipelines. This is practically the only country in the EU that insists on continuing the construction of the Nord Stream-2 gas pipeline. This is largely due to the implementation of ambitious, but possibly insufficiently substantiated plans to abandon atomic generation, while other EU countries are in no hurry to curtail the use of coal and peaceful atom.
Rejecting nuclear and coal energy is not cheap for the country - the price of electricity is rising. The main emphasis is on the development of renewable energy, which from expensive pleasure is gradually turning into a relatively inexpensive alternative, especially when it comes to electricity. At the same time, Germany is in no hurry with the development of renewable energy sources, relying on gas imports from Russia.
The structure of the German economy is typical for developed countries. 2/3 of GDP is provided by the services sector. Industry is in second place, while the share of agriculture is very small. And this is despite the fact that most of the territory is favorable for growing food crops and is located on the plain. Highly productive agriculture predominates. The country takes 1st place in milk production among the EU countries, in second place in grain production. This means that despite the small contribution of agriculture to GDP, the volume of agricultural products produced is very large.
The basis of German industry is chemical, engineering, electrical, shipbuilding and automotive. Until recently, coal was also developed, but now it has actually come to naught.
The state budget of Germany
Germany has a three-tier budget system:
- Federal budget.
- Regional (land) budget.
- Community Budget (Local). There are 11, 000 of them in the country.
In addition, various extrabudgetary funds operate.
The entire budget of Germany is divided into revenue and expenditure. The revenue side is formed by taxes, which give 4/5 of the budget revenues. Non-tax revenues are the profits of various organizations, rental payments and other types.
The expenditure side of the budget is associated with activities at the level of the federation, lands, communities. The share of government spending is about half of the country's GDP. In the 80s and 90s of the twentieth century, it gradually decreased.
An important expense item in Germany is the military sphere. Germany's military budget is about 30% (according to other sources - less than 2%) of the total budget.
Also of great importance are the costs of the economy. These include spending on utilities, housing, transport, industry (mining and processing), communications, and agriculture. Most of the costs (90%) are related to the construction of infrastructure.
Much less money goes to education and science - up to 5%. Spending on management is also small - 3%. Since 2002, the euro has been used as the base currency; before that, the German mark was used. The first budget, published in 2002, had an expenditure of € 247 billion.
The role of regions
Lands and communities form almost 100% of government spending on utilities, healthcare and education, more than 80% of the total costs of transport services, housing and roads, up to 3/4 of the cost of servicing the state apparatus, more than 40% of the costs of state payments debt. The increase in expenditures of communities and lands is not accompanied by an increase in their income base, therefore, the share of own revenues is falling, the share of subsidies from a higher rank of the budget system is growing. The mass of debt operations of regional authorities is increasing, which contributes to the growth of their budget deficits.
Budget deficit
The budget deficit problem for Germany is quite acute. The fight against him was one of the policy priorities of G. Schmidt and G. Kohl. Deficit growth was noted after the reunification of Germany in the 90s of the twentieth century.
Project and budget adoption
Consideration of the budget begins with the filing of applications for next year to the Ministry of Finance in the form of cost estimates. The finance minister (who is subordinate to the federal chancellor) is preparing a budget plan, which is transmitted to the Cabinet of Ministers. The plan is checked, amendments are made, a draft law is formed, which is then submitted for adoption to the relevant government departments.
Initially, the budget project goes to the Upper House, where it is considered for 3 weeks. After that, he goes to the Lower, which is called the Bundestag. If there are comments, any of these chambers may return the draft for reconsideration. When adopting the budget of Germany, unlike other countries, it is the Lower House that is entitled to approve or not approve the budget, and the Upper only considers and proposes amendments.
The federal government must follow the budget, albeit with some exceptions. In total, the budget adoption process consists of the following stages: drawing up, approval, implementation and monitoring of its progress.
The controlling body is the Federal Audit Office.
Profitable part
German budget revenues are almost equal to expenses. The main source of revenue is income from taxes, fees and payments. Regional budgets are replenished with excise taxes, transport tax, property tax, tax from gambling establishments, fees and duties. The state budget is replenished with taxation on profits of enterprises, corporations, value added tax and income of individuals. This includes customs duties and fees of the European Communities.
Expenditure part
60% of the budget is spent on social needs. It finances defense, debt servicing, investments in industry, agriculture, infrastructure, the work of the state apparatus, etc. Thus, the German budget expenditures are socially oriented.
Features of the budget of Germany for 2019
A significant share of the German budget has social spending. In recent years, they have grown particularly strongly due to the allocation of a large amount to ensure the life of refugees. These amounts amount to tens of billions of euros.
The main revenue side of the federal budget is the capital tax. Regional budgets are filled at the expense of industrial enterprises operating on their territory.
What is Germany's budget in numbers? Expenditures in 2019 will amount to 335.5 billion euros, which is 2% more than the corresponding amount in 2017. Defense spending will increase to 38.45 billion euros. This is due to the actions of Trump. The size of the budget will increase slightly compared to last year. 21 billion euros will be allocated for the arrangement of refugees and the fight against migration.
Thanks to success in economic development and the availability of 14 billion euros of free reserves, tax cuts are likely.
