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3.1.1. Role of the Federal Chancellery
The Federal Chancellery is composed of six political directorates, which are in turn
broken down into a range of groups and units. Apart from advising the Federal Chancellor
on government-wide strategic topics, the units “mirror” the various federal ministries and
agencies, in a manner broadly analogous to the “mirror units” whereby the Federal Ministry
of Finance keeps abreast of developments in the line ministries. Co-ordination between the
centre of government and the various arms of government is facilitated through the office
of the Federal Minister for the Federal Chancellery. Given the demands of state upon the
role of the Federal Chancellor, it is this Federal Minister who has the primary task of
preparing cabinet meetings, and of convening meetings of State Secretaries from the
various ministries to resolve outstanding issues insofar as possible.
The Federal Chancellery is also of primary importance in sustaining the political
commitment to top-down budgeting, which is not as yet provided for in law (unlike many
other areas of budgeting). Top-down budgeting was introduced by administrative and
political 
fiat
through the Coalition Agreement of the previous government of Germany
(2009-13). Political agreement at the highest levels was judged to be necessary so that the
traditional budgeting processes could be transformed to support the agreed national
objective of eliminating structural borrowing. 
As outlined in Section 1.3, a feature of the new top-down budgeting arrangement is
the preparation of a benchmark figures decision in March of each year, setting out the
spending envelopes for ministries and for key sectoral areas consistent with the fiscal
rules, in advance of the more detailed discussions with ministries about the details of how
the allocations will be used. While the Federal Ministry of Finance is the lead ministry in
preparing the benchmark figures decision, the Federal Chancellery plays an important
background role in engaging with ministries on the qualitative aspects of overall
allocations. This involves ensuring that high priorities or newly-emerging priorities of
government can be accommodated within the emerging envelopes of expenditure, and
managing political discussions for any necessary reallocations. After the benchmark
figures decision is taken, however, the Federal Chancellery steps back and does not get
involved in the detailed discussions unless particular issues cannot be resolved and must
be escalated.
Also as outlined in Section 1.4, the five-year Financial Plan, which was introduced as
an element in the 1967 
Act to Promote Stability and Growth,
has assumed a central importance
since the introduction of top-down budgeting in terms of mapping out the medium-term
evolution of the public finances in conformity with the fiscal constraint. The requirement
to keep within these fiscal limits means that when a new political priority emerges,
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 it is
more readily apparent that new expenditure demands must be matched with counter-
financing (offsetting savings or additional revenues). The Coalition Committee of
government, under the leadership of the Federal Chancellor, is therefore engaged from

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time to time not just on the task of agreeing new priorities, but in identifying areas which
must be de-prioritised in relative terms. In the past, new priorities tended to be settled at
the expense of the public purse. Under top-down budgeting within fixed fiscal constraints,
however, it is apparent that the influence of the policy divisions within line ministries has
increased, at the expense of that of the budget divisions.