What does 87 cents have to do with a multimillion euro election campaign?
And how come this neo-Nazi party is getting funding from the German state?!
It's all to do with the way political parties are financed in Germany.
The general principles of this party regulation and financial regulation,
I think they are fair, or at least they are well intended. But we have seen in the past
that there have been many loopholes and that the system could be manipulated.
In Germany, there's no limit on how much parties can spend on election campaigning.
But some parties have more to spend than others.
Here is how the disparity looked at the last federal election in 2017.
You can clearly see – the two biggest parties, the Christian Democrats and
the Social Democrats – spent at least triple the amount of the smaller parties.
These are the key sources of funding for German political parties:
membership fees; fees paid by MPs; donations; and "other" sources like sponsoring, assets,
shares, publications and events; and then there's the big one – state funding.
This system is supposed to make party financing fair,
transparent and give parties equal opportunity – and this is how it works:
The more votes a party gets, the more public money it gets.
Public support is measured by three things: votes, membership fees and donations.
For every vote a party gets, it also gets €0.87 from the state.
For the first four million votes, the figure is even a little more: €1.06 Euros per vote.
Then, for every euro a party gets in membership fees, it also gets €0.45 from the state.
This 45-cents-per-euro rule also applies for
personal donations - donations from people, not the ones from companies.
But there are regulations: you can only get these 45 cents for donations
up to €3,300 per person, per year. And there is a limit for the total
amount of state financing. In 2021, this limit was set at €200,049,468.
Smaller parties benefit from this system too. They might have fewer supporters, but they still
collect votes, membership fees and donations – and according to what we've just learned, this means:
They get the money from the state. Here's an example:
Last year, the neo-Nazi party NPD got €370,632.85 from the German state.
It's a very small amount compared to what the larger parties are getting – but a lot
of Germans aren't happy about it. Because the NPD has been ruled as anti-constitutional.
There is a push to stop public money going to the NPD.
The government has asked the country's top court to stop
state funding flowing to the extreme right. But the court doesn't seem to be in a big
hurry. That was in 2019, and we're still waiting for the verdict.
That's one problem in the system – but critics highlight other loopholes.
There's a lack of transparency. There is no limit to financial influence.
For example, donations to political parties, there's no legal maximum.
Indeed: In Germany, there's no limit on the amount parties can accept in donations.
To understand it better, let's have a look at the details: There are different transparency
rules for small, medium and large donations. Donations under €500 can stay anonymous.
If donations are more than €10,000, parties have to publicly declare where they came from.
They do this in their annual reports. The problem here, however, is that the
reports usually appear with a very long delay - of one to two years.
Only donations over €50,000 have to be declared immediately.
Another loophole in the system has to do with these guys here and plenty of other industry
players and business representatives. Instead of making large donations, big
companies often "sponsor" party events instead. For example, a car manufacturer displaying
products at a party conference – where they can also network with politicians.
Sponsoring doesn't have to be declared in the party's financial reports.
And this is really annoying. And from my perspective, that sponsoring activity is still
buried in this income from other activities category in the annual
reports of parties. And that means it is invisible, put differently: untransparent.
That brings us to another issue – the authority that's supposed to check if parties are
sticking to the rules – and fine them if not. Critics say that body is not fit for purpose.
For example, it cannot proactively investigate parties.
And it's also under the control of the Bundestag president,
who belongs to a political party himself. In the current government,
the president of the Bundestag is a member of Angela Merkel's Christian Democrats.
So there's potential for conflict of interest. Well, what we need is simply ameliorating the
system as it is, rendering the supervisory body more independent from politics, and
recognizing that donations, at least above €10,000, can really make an impact. And so
rendering a donors identity transparent immediately.
A look at the details makes it clear: There ARE many loopholes
in the system - and experts say addressing these would make party financing fairer.
Right now what matters to parties – and their bank accounts – is getting
as many votes as possible on September 26. Because the cents really do add up.