The federal government has apparently backed down from its plans to incorporate the profits of the state development bank KfW into the federal budget. Documents presented to the Budget Committee of the Bundestag, which the “Handelsblatt” (Friday edition) reported on, indicate this. Next year, KfW will assume the risks from loans it issued during the coronavirus pandemic, amounting to 519 million euros. Until now, the federal government bore responsibility for the loan losses because KfW implemented this special program on behalf of the government. According to an addition to the cleaning bill that the Federal Ministry of Finance sent to the Budget Committee this week, this transfer represents KfW’s contribution to offsetting the tax relief of the reform and tax package, fulfilling the coalition agreement. The report also suggests this will apply to the next year. Furthermore, sources close to the matter indicated that the development bank will raise its own funding programs to further relieve the federal budget. Originally, the federal government planned to transfer 500 million euros from KfW’s profits to the federal budget in both 2027 and 2028. However, this would have required amending the KfW Law, which currently prohibits such profit distributions. The newly conceived measures would relieve the budget without requiring a direct profit transfer. KfW declined to comment on the information. The Federal Ministry of Finance stated that the budget process is currently underway and that the results cannot be anticipated.
Mixed
