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4.4. Consideration of fiscal risks
Beyond the specific topic of long-term sustainability, there are a range of mechanisms
in place in Germany for factoring fiscal risks into the policy-making process, reflecting the
heterogeneity of risks that arise from various sources. For example, Germany has a long
tradition of supporting trade and economic development through the provision of
guarantees and surety obligations to the private sector. Under Article 115(1) of the Basic Law,
all such guarantees must be specified, quantified and authorised in a federal law. In
practice, the federal Budget Act has been used as the vehicle for dealing with all such
guarantees so that the amounts involved can be taken into account in the context of the
overall budget calculations. 
Over recent decades, however, the use of guarantee authorisations has expanded
considerably in scope, in particular in response the global financial crisis since 2008 (see
Figure 3 below). Apart from the budget authorisations, additional guarantees may be given
to address “unforeseen and compelling needs” subject to the prior consent of the Budget
Committee of the 
Bundestag
. Depending on the nature of the issue under consideration, it
is open to the Budget Committee – and indeed to other parliamentary committees that
examine matters relating to fiscal risk – to address these matters in private session.
The 
Finanzbericht
(detailed annual financial/budgetary report) provides an overview of
the various guarantees and other contingent liabilities including, in recent times, euro
stabilisation measures. As outlined in the next section, the future costs associated with
capital projects and in particular Public-Private Partnerships (PPPs) feature also in the
budget documentation. More generally, the range of economic risks and forecasting/
estimation risks are addressed in the respective economic reports throughout the annual
cycle. The Federal Court of Audit also plays a role in commenting upon estimation risks at