The financing of political parties in Germany explained – POLITICO

Germans like to think of themselves as an orderly group that follows the rules. But when it comes to party donations, German politicians have not always been perfectly straightforward.

Over the years, the country has been hit by various party funding scandals. Stories of suitcases full of cash delivered straight to the Chancellor’s office have seriously tarnished Helmut Kohl’s legacy. More recently, Parliament imposed a heavy fine on the far-right Alternative for Germany for illegal transfers from a company based in Switzerland.

This is of course not how it should work. But party funding will come under scrutiny again as parties attempt to gain advantage through corporate and individual donations as the general election campaign in Germany intensifies.

Here is POLITICO’s guide to everything you need to know about political party funding in Germany.

How is this supposed to work?

Dos and Don’ts are defined in the Law on Political Parties.

Parties have three main sources of income: state funding; membership fees or salaries of elected officials such as deputies; and private or corporate donations.

State funding is based on the party’s “rootedness in society”. This is calculated based on the number of votes a party won in the last European, federal and national elections, and the amount it received in membership fees and donations.

The idea is that the more relevant a political party is to society as a whole, the greater its need for neutral funding. Smaller or newer parties therefore have an inherent disadvantage in the German system.

However, being “rooted in society” does not necessarily mean being part of the mainstream politics. The neo-Nazi National Democratic Party of Germany (NPD) received € 350,000 in taxpayer money in 2020 and is expected to receive the same amount this year. The German government, together with both chambers of parliament, has filed a petition with the Constitutional Court to stop funding the party with public funds. The court has yet to rule on the case.

Are there limits to state funding?

A party can never receive more state funding than it generates from its own revenue in any given year. In other words, up to 50% of a party’s income can come from the state.

The total ceiling for public funding of political parties is set each year by the President of the Bundestag. This amount has increased considerably in recent years: in 2010, the total was 133 million euros; the figure for 2021 exceeds 200 million euros.

The sharp increase was made possible by an amendment to the Party Law in 2018. The ruling parties (CDU / CSU and SPD) argued that due to new developments – such as social media and digitization – political parties needed more funds. The amendment was adopted despite opposition from all other parties in parliament.

How much do political parties depend on donations?

For political parties represented in the federal parliament, state funding accounted for over a third of total revenue streams in 2019. Membership dues were the second most important source of income, while donations accounted for around 14 % of their income.

Donations – private and corporate – generally increase sharply during an election year.

Are there any limits on holiday donations?

Not really.

After the Christian Democrat funding scandal that tarnished Kohl, several adjustments to the law on political parties were made. These adjustments, however, have mainly focused on transparency, rather than imposing restrictions.

Donations to parties over € 50,000 must be reported immediately to the President of the Bundestag, who then publishes the information on the parliament’s website. There is no limit on personal or corporate donations.

Donations over € 10,000 must be published in each party’s annual report, which the Speaker of Parliament checks and publishes online. In practice, full reports are not made public until two years later. Thus, donations of less than € 50,000 made during the current election year will probably not be published until early 2023.

Critics say these regulations are too lax and easy to circumvent. Lobbycontrol, a transparency-focused German NGO, reported that the CEO of a slot machine company donated € 120,000 to the Christian Social Union of Bavaria in 2018 – but did so by making one donation as an individual and five others through businesses he owned. He thus avoided having his donations made public immediately, each being under the limit of € 50,000. In the same year, German politicians decided whether or not to impose stricter regulations for slot machines.

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