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Arc 2 – Towards the Draft Budget and Financial Plan.
As the Stability Programme cycle
is being completed, a new round of independent economic forecasts sets the scene for the

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BUDGET REVIEW: GERMANY
OECD JOURNAL ON BUDGETING – VOLUME 2014/2 © OECD 2015
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detailed budget preparations. The Ministry of Economics commissions a “Joint Economic
Forecast” (JEF) from a panel of experts from independent research institutes in Germany.
This forecast is not adopted directly by the federal administration, but is an important
reference for the preparation of the official Macroeconomic Forecast published in late
April. The federal government’s forecasts are compared with the current forecast by
national and international institutions. On the basis of this document, a tax revenue
forecast is prepared by the Working Party on Tax Revenue Forecasts, an independent
advisory council which includes outside economic experts as well as Ministry officials. 
In parallel, the line ministries transmit their detailed budget bids – in observance of
the constraints set by the benchmark figures decision – on line item level in April. These
bids form the starting-point of negotiations between the Federal Ministry of Finance and
the line ministries between April and June. On the basis of these discussions, and informed
by consultations with the Stability Council (see next paragraph), the federal government
decides in cabinet on the draft budget at end of June/beginning of July. 
Also in parallel, during June-July, the Stability Council becomes engaged, and the
implications of the economic and revenue assessments for national budgetary policy
(i.e. for both the federal and Land levels) are discussed at this forum (see Section 2.2).
The conclusions feed into the preparation of a “Stability Report” which will go on to be
evaluated, and to be considered in the budgetary finalisation process, over the
autumn.
This budget draft is submitted to the 
Bundestag
and the 
Bundesrat
in mid-August and
presented before the 
Bundestag
(“first reading” of the Budget) in September. 
In the general government perspective, the draft Budget is accompanied by the
important “Financial Plan” which includes budgetary allocations for each line Ministry for
the three years following the budget year (see Section 1.4 below). 
The draft Budget in turn forms the basis for the second Maastricht notification of the
year to the European Commission (at end-September) and the draft budgetary plan
which must also be submitted to the European Commission by mid-October for
consideration under the newly-strengthened EU economic surveillance regime for euro-
area countries.