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Germanys Political Party Funding Is Explained

Several party finance scandals have rocked Germany in recent years | David Gannon/AFP via Getty Images Germans like to think of themselves as a law-abiding people who follow the rules.
But, when it comes to campaign contributions, German politicians have not always been spotless.
Several party funding scandals have rocked the country throughout the years.
Helmut Kohl’s name has been tainted by stories of suitcases full of cash being delivered directly to the chancellor’s office.
Most recently, the far-right Alternative for Germany was fined a large sum by parliament for unlawful transfers from a Swiss-based corporation.
Of course, this isn’t how it’s supposed to function.
But, as Germany’s general election campaign heats up, party funding will be scrutinized once more as parties aim to gain an advantage through donations from firms and individuals.
POLITICO has compiled a comprehensive guide to political party funding in Germany.
I’m not sure how it’s supposed to function.
The Law on Political Parties lays forth the dos and don’ts.
State financing, contributions from members or wages of elected officials such as MPs, and private or corporate donations are the three main sources of income for political parties.
State funding is determined by a party’s “rootedness in society,” which is determined by the number of votes it earned in recent European, federal, and state elections, as well as membership contributions and donations.
The premise is that the more important a political party is to society as a whole, the more neutral funding it requires.
Under the German system, smaller or newer parties are consequently at a disadvantage.
Being “rooted in society” does not, however, imply being a member of the political establishment.
In 2020, the neo-Nazi National Democratic Party of Germany (NPD) received EUR350,000 in taxpayer funds, and the same amount is expected this year.
Germany’s government and both chambers of parliament have petitioned the constitutional court to restrict the government from financing the party with public funds.
The matter has yet to be decided by the court.
Is there a cap on state funding?
In any given year, a political party can never receive more public money than it generates via its own resources.
In other words, the government can fund up to 50% of a political party’s income.
Every year, the president of the Bundestag sets a total ceiling on state support for political parties.
This sum has risen substantially in recent years: in 2010, it was EUR133 million; in 2021, it will be more than EUR200 million.
An revision to the party law in 2018 allowed for such a substantial increase.
The ruling parties (CDU/CSU and SPD) contended that new developments, including as social media and digitisation, necessitated increased funding for political parties.
Despite resistance from all other parties in parliament, the amendment was carried.
How reliant on funding are political parties?
In 2019, state funding accounted for more than a third of total income flows for political parties represented in the federal parliament.
Membership dues were the second most important source of income, with donations accounting for roughly 14% of their total income.
In an election year, both private and corporate donations typically climb dramatically.
Are there any restrictions on the amount of money that can be donated to a political party?
Not at all.
Following the Christian Democrat funding controversy that tarnished Kohl, the Law on Political Parties was amended.
Yet, rather than imposing limits, these changes emphasized transparency.
Parties that receive more than EUR50,000 in donations must promptly notify the president of the Bundestag, who then posts the information on the parliament’s website.
There are no restrictions on individual or corporate donations.
Contributions of more than EUR10,000 must be disclosed in each party’s annual report, which is checked and published online by the president of parliament.
In practice, full reports are only made public two years after they are completed.
As a result, donations of less than EUR50,000 made during the current election year are unlikely to be made public until early 2023.
Opponents argue that the regulations are too loose and easy to circumvent.
According to Lobbycontrol, a German transparency group, the CEO of a gaming machine manufacturer donated EUR120,000 to Bavaria’s Christian Social Union in 2018 — but only one as an person and five more through businesses he owned.
As each of his donations was beneath the EUR50,000 limit, he was able to avoid their being made public right away.
In the same year, German legislators were debating whether or not to enforce stricter gambling machine regulations.

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