Coordination of Budgetary and Financial Planning

Under section 51 subsection (1) of the Budgetary Principles Act, the Stability Council is to consider the overall economic and fiscal conditions in existence at the time of drafting the federal, Länder and local government budgetary and financial plans. The aim is to coordinate budgetary and financial planning among the various levels of government.

This ensures that the monitoring of the Federation and Länder budgets in the Stability Council takes the overall economic and fiscal policy context into account. This includes compliance with the provisions of the EU Stability and Growth Pact as well as making sure that the need to take the overall economic situation into account is respected.

The Stability Council has taken over the task of fiscal coordination from the Financial Planning Council (Finanzplanungsrat), a body set up for this purpose at the end of the 1960s. The creation of the Stability Council as part of the second stage of reforming Germany’s federal structures rendered the Financial Planning Council obsolete and it was disbanded in 2010. Its functions were transferred to the Stability Council.