Party finance in Germany is the subject of statutory reports, which up to 35 parties file annually with the administration of the German parliament. Important questions pertaining to political party funding can be answered by analysing the data given in these financial reports: How much money is raised and spent by each party operating in Germany? What assets are at the disposal, which debts are on the books of German parties? For which purposes did parties spend their funds (during any calendar year since 1984)? From which itemized sources did a specific party collect its revenue (since 1968)? Who are the donors of major contributions (in excess of €10,000) and how much did each donor give during a specific calendar year?
As a consequence of Hitler's rise to power in 1933 political funding has been an issue of German politics since the postwar years. Political finance legislation started in 1967 and by 1983 was more comprehensive than other established democracies. Spending by German parties holds a medium-range position among democracies, old and new. German parties spend most of their funds on the routine operation of an impressive full-time organization, nationally and in the field. There are two major and two minor sources of revenue for German parties. On average public subsidies as well as membership dues each provide one third of all party income. The final third of total revenue is raised from donations and by assessment of incumbents, mostly in the municipalities.
By October each year political parties file a financial report for the previous calendar year with the administration of the federal parliament (Präsident des Deutschen Bundestages). These annual reports cover the whole party organization (headquarters, regional branches and local chapters). They are tabled as parliamentary papers and published by the speaker of the Bundestag without attracting much interest among the general public or the media. The data presented in the annual financial reports (Rechenschaftsberichte) of German parties cover the sources and the use of political funds as well as the financial situation (debts and assets) of each party. A list of the reports is available at the Bundestag website, and individual reports can be downloaded from there.
Party spending + Spending by parties represented in the German parliament (in million €) 2011 Party Campaigning General political activity Routine operations Staff (salaries and benefits) Other expensesCDU 27.0 30.7 28.0 42.0 4.7 SPD 24.1 32.1 28.6 46.4 10.3 FDP 7.9 10.2 10.0 5.3 1.3 Left Party 4.5 6.9 5.0 10.2 0.2 Green Party 7.2 8.1 5.6 11.1 0.5 CSU 0.9 13.7 7.1 9.8 0.4 Source: Parliamentary paper (Bundestags-Drucksache) No. 17/12340 During the 2006–2009 election cycle, the six parties represented in the federal parliament (Bundestag) had an aggregate budget of €1.8 billion, an average of €450 million per calendar year. As in other democracies, spending in election yearssee Political finance. is higher than in non-election years. This means that in election years the two major parties (CDU/CSU and SPD) can spend about €200 million each, whereas four minor parties (The Greens, FDP, CSU, Die Linke) have annual budgets of about €40 million each.
The distribution of funds among the parties that elect federal MPs has stayed more or less stable for many years. Just one change is noteworthy: whereas at the turn of the century the financial means of the major parties were more balanced, recently the governing CDU/CSU has re-established its traditional lead in financial terms. The total outlay for up to 30 other parties that are not represented federally is less than 10 percent of the overall party expenses (as well as revenue). During the years 1984 to 1989, all German parties together spent a total of €5 to 7 per German citizen (person entitled to vote, voter on list). For 1991 to 2009, the annual aggregate per capita spending amounted to some €5 to 10. Taking the rate of creeping inflation into account, German parties have had a hard time to keep up their previous spending levels.http://www.bpb.de/publikationen/05032375937874469878037244421420,0,0,Parteienfinanzierungh.htm.
Compared with other democracies, the average outlay for all German parties is in a medium range among 18 nations. Parties in Austria, Israel, Italy, Japan and Mexico spend between two and three times the annual per capita amount of their German counterparts. Parties in Australia, Canada, Denmark, the Netherlands, the U.K. and the U.S. spend between a quarter and a half of the German average. As far as reliable data are available, this international rank order of party spending levels has been fairly stable during the second half of the 20th century.Nassmacher, Karl-Heinz, The Funding of Party Competition; Political Finance in 25 Democracies. Baden-Baden: Nomos Verlag, 2009, p. 118.
The first item of party spending that comes to mind is election campaigns; a European may also recall that parties employ staff and run permanent offices "on the ground". Someone with an inside view of party activity may also think of conventions, meetings, mailings and other communication. In Germany, campaigns at all levels of the federal system (national, state and municipal) are run by parties rather than candidates. Nonetheless, over the whole election cycle campaign spending adds up to less than spending on staff, offices and internal communication. An important impact on this distribution among spending items is certainly caused by the fact that during a campaign for all states, the federal and the European Parliaments public networks provide free airtime on radio and TV to all competing parties.
German parties have estimated that less than 30 per cent of their total expenses are related to the use of media (billboards, advertising in newspapers and magazines, advertising with privately owned networks), which is quite important for campaign purposes.Parliamentary paper (Bundestag-Drucksache) no. 14/637, pp. 34s (can be downloaded in German from http://drucksachen.bundestag.de/drucksachen/index.php). Even in 2009, a year with two nationwide elections (for the European and the federal parliaments), the six Bundestag parties spent between 41 and 50 percent of their total budgets on campaigning. Only the Bavarian wing of the Christian Democrats, the CSU, spent less (32 percent of its annual expenses).Parliamentary paper (Bundestag-Drucksache) no. 17/4800 (can be downloaded in German from http://drucksachen.bundestag.de/drucksachen/index.php).
In 2009, salaries and related benefits accounted for almost 23 percent of the total expenses of the parties that elected MPs. About 15 percent of the annual total expenses was operational spending for running a party organization on at least 3, sometimes 4 levels (national, regional, county and townshipMost of the major cities in Germany have a county status, three are even states of the federation. City and state parties have local subdivisions (Ortsverbände, Ortsvereine).). As a consequence, the party apparatus accounted for about 38 percent of total expenses (even in an election year). Among the minor parties, only the FDP (29 percent) spent less, The Greens and The Left (41 percent each) also spend above the average share—just to keep the party organization running.
Political revenue + Revenues of parties represented in the German parliament (in million €) 2011 Party Membership dues Public subsidies Donations Assessment of incumbents Other revenueCDU 40.1 44.6 21.8 17.5 16.9 SPD 47.5 42.4 12.1 22.6 31.1 FDP 7.4 13.6 6.6 3.3 3.3 Left Party 9.7 12.1 1.9 3.9 1.0 Green Party 8.0 13.8 4.8 7.7 2.5 CSU 10.2 10.4 5.9 3.0 7.5 Source: Parliamentary paper (Bundestags-Drucksache) No. 17/12340 As in many other countries, the funds spent by political parties are raised via membership dues, individual and corporate donations and grants from the public purse (public subsidies). In 2009 (an election year), the SPD raised €173 million and the CDU €163 million. For CSU, The Greens, FDP and The Left, total revenues during the same year ranged between €27 and 43 million. A quick glance at the total revenue of the parties represented in the Bundestag reveals that a total of €128 million came from public subsidies and €121 million were dues paid by signed-up party members. Donations (from all sources) totalled €90 million and assessments from office-holders (mostly municipal councillors, but also state legislators, MPs and MEPs) added another €55 million.
Because the threshold for access to public subsidies (0.5 percent of the national vote) is quite low, about 20 different parties receive a cash grant from taxpayers' funds. However, more than 95 percent of the total grant (€133 million, absolute Obergrenze) goes to the six parties that are represented federally. About 85 to 90 percent of the revenue total raised by membership fees plus donations is less than €3,300 per donor and year. Since the 1970s, corporate donations have dramatically lost their previous importance. Four events or decisions may have been influential: (1) tax benefits for political donations were limited to individual donors and small amounts by Supreme Court (Bundesverfassungsgericht) ruling, (2) various scandals have raised awareness of parties, donors, media and the general public, (3) parties get reliable funding of their most important needs via public grants and (4) there is no need to "buy" access to politicians or influence peddling because sufficient non-financial channels for both types of lobbying are available.
Any attempt to assess the public share of all party funds may start with the parties' annual reports. The figures given there imply that in 2009 (an election year) some 27 percent of total party revenue officially came from public subsidies. During the election cycle 2005–09, direct subsidies to party organizations amounted to an average of almost 29 percent of total revenue. This has, however, to be supplemented by an indirect source of public funding, the assessments of office-holders to those who nominated them (e.g. transfers of a proportion of the salaries of members and their allowances to party coffers. The total of such "party taxes" adds up to about 10 percent of party income. This brings the public contribution to about 40 percent of total party funds. Another source of indirect public funding results from the tax benefits that people making party contributions (including membership dues and "party taxes") up to €3,300 per individual taxpayer and year can claim against their income tax liability. An estimated loss in public tax revenue of €100 million would add about 20 percentage points and increase the direct and indirect cash subsidies from the public purse to party organizations in Germany to some 60 percent of total party income.
Finally, a note of reservation is appropriate: the share of public funding elaborated in the previous paragraph includes only cash that flows into the coffers of the party organization proper (at all levels of the political system). Considerable public subsidies to parliamentary party groups (caucuses) in the federal, European and state parliaments as well as in municipal assemblies, funds for the operation of party political foundations (especially their activities within Germany), transfers to party youth associations and the allowances paid to MPs (for staff and constituency offices) are not included. Moreover, party election campaigns are supported by free airtime on radio and TV as well as billboards paid for by municipal authorities.For details see Nassmacher, Karl-Heinz, The Funding of Party Competition. Baden-Baden: Nomos Verlag, 2009, pp. 57–60, 92–95.
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