Political Parties and Their Funding in Germany

Abstract

In Germany, as in most modern democracies, the funding of political parties is a sensitive issue and even after a changeful history of party funding with many scandals the present model is not perfect. There is a combination of private funding and partial public funding (which must, however, not affect the freedom of the political parties from state influence [Staatsfreiheit der Parteien]), flanked by strict rules of financial accountability. Donations are the most controversial element. There is neither a ban on donations from companies nor an absolute limit for donations. Only donations of more than 50 000 € must be reported immediately and will be made public in a timely manner so that it is ensured that the citizens are informed about them before the next elec­tions. Con­cer­ning public funding, there is an indirect funding through income tax reductions on membership fees and (limited) on donations, plus a direct public funding (per vote and per contribution), which must not be higher than the revenue from private fun­ding. Since 2017, parties seeking to undermine or abolish the free and democratic constitutional order shall be excluded from the public funding.
In order to ensure transparency, every party must submit for each calender year a correct and exhaustive audited public statement of accounts. In case of illegal donations or incorrectness of the state­ment there are sanctions, which are, however, rather soft. The Council of Europe’s Group of States against Corruption (GRECO) has criticised the intransparency arising from the fact that party donations up to 50 000 € do not need to be reported immediately but only in the annual statement of accounts, which may be published several months after the elections influenced by them. So there is still room for improvement.