Länderverschuldung: Hoher Konsolidierungsbedarf, unzureichende Konsolidierungsbemühungen

In a bold legislative move, in 2009 Germany introduced a fundamental reform of the government borrowing rules which are specified in its constitu-tion. In particular, state governments will be required to provide a balanced budget, abstracting from cyclical fluctuations, starting in the year 2020. A fundamental requirement for the practical implementation of such a rule is the unequivocal decomposition of the actual budget surplus or deficit into derived structural and cyclical components. This paper uses an approach de-signed to identify cyclical components which tend to average out over time, and calculates the corresponding current structural deficits of all 16 federal states. We find that, at the time being, only two federal states have exerted sufficient effort to reduce their structural deficits to an extent which would be fully compatible with the objective of adhering to the constitutional rules at the end of this decade.