Judgment of 19 July 1966

R e a s o n s :

A.-I.

1

The federal budget for the 1959 fiscal year is the first federal budget to provide for grants to political parties. Upon a proposal by the Bundestag Budget Committee, DM 5 million were made available in Section 06 – under the administration of the Federal Ministry of the Interior – Chapter 02 Title 620 for the purpose of providing ‘grants to support political education initiatives of the parties’.

2

The explanatory notes on this title read in relevant part as follows:

3

The funds are intended to support the political parties in the exercise of their mandate to contribute to the political education of the German people (...)

4

The funds were transferrable. They were initially blocked and could only be released following approval by the Budget Committee. In its 107th meeting on 10 February 1960, the Budget Committee decided unanimously:

5

1. Title 620 of Chapter 0602 is to be released for the 1959 fiscal year. The funds will be distributed to the parties represented in the Bundestag based on their relative strengths in Parliament.

2. The funds will be transferred to a special account of the federal headquarters of the parties. On behalf of the parties’ federal executive committees, two representatives of each party will confirm in writing to the Federal Government that the funds earmarked for the purpose set out in the federal budget have been received. The parties will use the funds on their own authority, without any particular directions for use set by the ministry. They will submit a written report regarding the use of the funds to the President of the Federal Court of Audit (Bundesrechnungshof) no later than six months after the end of the fiscal year.

6

The same amounts were made available for the same purpose in the federal budgets for 1960 and 1961. The amounts were distributed in the same way as in 1959.

7

An amount of DM 20 million was made available in the federal budget for the 1962 fiscal year in Section 06 under the administration of the Federal Ministry of the Interior in Chapter 02, Title 612. In addition to ‘extra funds for political education initiatives’ in the amount of DM 5 million – Subtitle 612a – the title for the first time comprised ‘extra funds for the tasks of political parties under Article 21 of the Basic Law’ in the amount of DM 15 million – Subtitle 612b. These funds were only subject to review by the President of the Federal Court of Audit. The explanatory notes on the distribution of funds from Subtitle 612a read as follows:

8

The funds will be distributed to the parties represented in the Bundestag based on their relative strengths in Parliament.

9

The funds from the new Subtitle 612b were initially blocked. In its 34th meeting on 29 June 1962, the Bundestag Budget Committee decided that Subtitle 612b was to be distributed in the same way as Subtitle 612a. The entire funds from Chapter 0602 Title 612 – DM 20 million – were distributed to the parties represented in the Bundestag according to the d’Hondt method.

10

In the budget for 1963, Subtitle 612a (extra funds for political education initiatives) was discontinued. At the same time, the ‘extra funds for the tasks of political parties under Article 21 of the Basic Law’ were increased from DM 15 million to DM 20 million (Section 06 Chapter 02 Title 612). The explanatory notes on Title 612 read in relevant part as follows:

11

20% of the funds is distributed to the four parties represented in the Bundestag, with each party receiving 5%; the rest of the funds is distributed to the parties represented in the Bundestag based on their relative strengths in Parliament.

12

The ‘extra funds for the tasks of political parties under Article 21 of the Basic Law’ (Section 06 Chapter 02 Title 612) were increased to DM 38 million in the federal budget for the 1964 fiscal year. These funds continued to be subject to review by the President of the Federal Court of Audit only. The following additions were made to the explanatory notes on the 1963 budget:

13

The funds available to each party will be disbursed upon application. The application can be limited to parts of the funds.

14

The system adopted for 1964 was repeated in the budget for the 1965 fiscal year. The federal budget for the 1966 fiscal year provides for the same system.

II.

15

1. In its application for abstract judicial review (Art. 93(1) no. 2 of the Basic Law, Grundgesetz – GG, § 76 of the Federal Constitutional Court Act, Bundesverfassungsgerichtsgesetz – BVerfGG), the Land Government of Hesse seeks the following declaration:

16

§ 1 of the Act of 18 March 1965 on the Setting of the Federal Budget for the 1965 Fiscal Year (Gesetz über die Feststellung des Bundeshaushaltsplans für das Rechnungsjahr 1965; Federal Law Gazette, Bundesgesetzblatt – BGBl. II p. 193) violates Art. 30 and Art. 21(1) first sentence in conjunction with Art. 20(1) and Art. 21(1) second sentence, Art. 21(1) third sentence and Art. 3(1) of the Basic Law and is void, insofar as this provision has made an amount of DM 38 million available in Section 06 Chapter 02 Title 612 for the tasks of political parties under Article 21 of the Basic Law.

17-26

[…]

27

2. The Bundestag, the Bundesrat, the Federal Government and the Land governments were given the opportunity to submit statements pursuant to § 77 of the Federal Constitutional Court Act.

28-52

[…]

53

3. The Federal Constitutional Court gave the opportunity to submit statements in these proceedings to representatives of the following parties: the Sozialdemokratische Partei Deutschlands, the Christlich Demokratische Union Deutschlands, the Christlich-Soziale Union, the Freie Demokratische Partei, the Gesamtdeutsche Partei (DP/BHE), the Bayernpartei, the Deutsche Friedens-Union and the Nationaldemokratische Partei Deutschlands.

54-76

[…]

III.

77

The federal treasurers of the Sozialdemokratische Partei, A. N., of the Christlich Demokratische Union, Professor F. B., of the Freie Demokratische Partei, H. W. R., and the Land treasurer of the Christlich-Soziale Union, Dr. F. Z., were heard in these proceedings. Their statements focused on the use of the DM 5 million extra funds for political education initiatives, Subtitle 612a Chapter 0602 of the 1962 federal budget, the question of how their respective party distinguishes between political education initiatives and other activities, their party’s expenditure and income – including non-cash benefits – in 1962, 1964 and 1965, the relationship between state payments and other party income, and the additional party income and expenditure for the Bundestag campaigns of 1957, 1961 and 1965.

78-89

[…]

B.

90

The application is admissible.

91

1. The admissibility of the application is not precluded by the fact that the Second Senate of the Federal Constitutional Court stated, in the reasons to its judgment of 24 June 1958 (Decisions of the Federal Constitutional Court, Entscheidungen des Bundesverfassungsgerichts – BVerfGE 8, 51 <63>), that the state must be allowed to provide financial resources not only for elections, but also for the political parties participating in these elections. This was contrary to the view put forward by the Land Government of Hesse, the applicant at the time, which argued that the state was constitutionally barred from providing any direct or indirect financial support to political parties. In its judgment of 24 June 1958, the Court did not decide on the same subject matter that is at issue in the present proceedings. It is neither the wording of the application nor the applicant’s ideas and legal assertions that are the subject matter of judicial review proceedings. Rather, such proceedings concern the question of whether a specific piece of legislation is valid or invalid, i.e. whether it is objective law or not, and a judicial finding to this effect; this question is independent of individual rights and legal views (BVerfGE 1, 208 <219 f.>, 396 <406 f., 414>). It is only with regard to this finding that a decision in judicial review proceedings can have the force of law. This legal effect solely concerns the operative part of the decision; it does not concern the elements contained in the reasons to the decision, even though these can be used to elucidate the meaning of the operative part (cf. BVerfGE 4, 31 <38 f.>; 5, 34 <37>).

92-94

[…]

95

There is no general procedural principle according to which the same applicant can resubmit the same question of constitutional law to the Federal Constitutional Court only if new legal aspects are submitted or the circumstances or the general legal view have changed fundamentally. […]

96

2. The application is also not rendered inadmissible due to an alleged absence of legislation whose validity can be reviewed in proceedings involving the abstract judicial review of a statute. § 1 of the Federal Budget Act 1965 in conjunction with Section 06 Chapter 02 Title 612 authorised the Federal Minister of the Interior to disburse DM 38 million as extra funds for the tasks of political parties under Art. 21 of the Basic Law. This provision is law within the meaning of Art. 93(1) no. 2 of the Basic Law and § 76 of the Federal Constitutional Court Act and can therefore be reviewed as to its compatibility with the Basic Law in abstract judicial review proceedings.

97

a) The Federal Constitutional Court held in several decisions that ‘law’ within the meaning of these provisions refers to all provisions contained in a piece of legislation, regardless of whether they set out abstract and generalised legal principles in the traditional sense; the expression ‘federal law’ is intended to describe the subject matter of judicial review as comprehensively as possible (BVerfGE 1, 396 <410>; 2, 307 <312>; 4, 157 <162>). The Court also reviewed statutory provisions regarding the establishment of a foundation or of a higher federal authority, without doubts being raised regarding the admissibility of the applications (cf. BVerfGE 10, 20 <35>; 14, 197 <209>). The Court found that the type of legislation at issue determines which types of recourse to the Court may be admissible (BVerfGE 12, 354 <361>).

98

b) Under Art. 110(2) first sentence of the Basic Law, the federal budget is set by a law. Art. 111 of the Basic Law authorises the Federal Government to allow for specific expenditures, determined in Art. 111, if the federal budget for the following year has not been set by a law by the end of the fiscal year. Art. 112 of the Basic Law provides that expenditures in excess of the budget or extraordinary expenditures require the consent of the Federal Minister of Finance. It follows from Arts. 111 and 112 of the Basic Law, which are not modelled on provisions in the Weimar Constitution (Weimarer Reichsverfassung), that other expenditures may only be allowed for if they are included in the federal budget set by a Budget Act. It must be concluded from the interaction of Arts. 111 and 112 of the Basic Law with Art. 110(2) of the Basic Law that in ‘setting’ the budget, the Budget Act also ‘approves’ the allocation of the funds provided for in the federal budget, which means that the act authorises the government to spend the funds for the purposes set forth in the federal budget. The authorisations in Arts. 111 and 112 of the Basic Law replace the spending authorisations under the Budget Act. The fact that in ‘setting’ the budget, the Budget Act also ‘approves’ the use of funds further follows from an unbiased interpretation of the wording of Art. 110(2) of the Basic Law, in particular its third sentence in conjunction with its fourth sentence (third sentence: ‘The expenditures are generally approved for one year …’; fourth sentence: ‘For the rest, no provisions may be included in the Federal Budget Act that go beyond the fiscal year …’).

99-100

[…]

101

This authorisation also confers powers and responsibilities on constitutional organs that they would not have – at least not in the same way – without the Budget Act and the federal budget ([…]). The authorisation given to the Federal Minister of the Interior in § 1 of the Budget Act 1965, in conjunction with Section 06 Chapter 02 Title 612 of the federal budget, to spend a certain amount for a specified purpose is a piece of legislation that is comprehensible in itself and that can be reviewed as to its formal and substantive compatibility (cf. Art. 93(1) no. 2 of the Basic Law) with the higher-ranking provisions of the Basic Law; it can be valid or void ([…]).

102

[…]

103-105

c) […]

106

d) […]

107-109

3. […]

110

4. […]

C.

111

The application is well-founded.

I.

112

In its judgment of 24 June 1958, the Court held that the primary purpose of political parties is to serve as organisations preparing elections, and that their funds, too, primarily serve this purpose. The Court argued that the holding of elections is a public task and that the Constitution assigns parties a decisive role in performing this public task. It held that it must therefore be permissible for the state to provide financial resources not only for elections as such, but also for the political parties participating in these elections (BVerfGE 8, 51 <63>; 12, 276 <280>). The legislative bodies of the Federation and the Länder could, and did, understand these considerations to mean that it was permissible under constitutional law to provide grants to political parties from the state budget for all of their political activities.

113

On the basis of the oral hearing on the present application by the Land Government of Hesse, the Court now finds that it is incompatible with Arts. 21 and 20(2) of the Basic Law to provide grants to political parties from the state budget for all of their activities concerning the formation of public opinion and of the political will. The funds provided under Section 06 Chapter 02 Title 612 of the 1965 federal budget constitute such grants. The purpose stated for this title is as follows: ‘Extra funds for the tasks of political parties under Article 21 of the Basic Law’. According to this purpose, the grants are intended for all of a party’s political activities. This is incompatible with the Basic Law. § 1 of the Federal Budget Act 1965 is therefore void insofar as it authorises the Federal Minister of the Interior to disburse DM 38 million to the political parties. By contrast, it is compatible with the Basic Law to reimburse political parties, which primarily participate in the formation of the political will of the people through their involvement in parliamentary elections, from the federal budget for necessary campaign costs, provided that these are within reasonable limits.

II.

114

1. In creating the free democratic basic order, the constitutional legislator chose to favour a free and open process through which public opinion and the political will of the people are formed. The state financing of all political activities of political parties is not compatible with this decision.

115

a) Freedom of expression, freedom of the press and freedom of broadcasting, as guaranteed by Art. 5 of the Basic Law, are key elements of the free democratic order (BVerfGE 5, 85 <134 f., 205>; 7, 198 <208>; 12, 113 <125>). Art. 5 of the Basic Law also guarantees that public opinion can be formed freely (BVerfGE 8, 104 <112>). Moreover, a general right to free political activity can be derived from the fundamental right to freedom of expression (BVerfGE 5, 85 <134 f.>). The freedom of expression, freedom of association and of labour coalitions, freedom of assembly and the right of petition serve to guarantee the freedom of the formation of public opinion and of the political will of the people. Arts. 21, 38 and 28 of the Basic Law also protect the free formation of the political will of the people. The objectives, political views and positions reflected in public opinion have been characterised as the ‘pre-shaping of the formation of the political will of the people’ (cf. BVerfGE 8, 104 <113>). In a democratic state, the formation of the will of the people must be free, open and unregulated (cf. BVerfGE 9, 162 <165> […]). The ongoing process through which public opinion and the political will of the people are formed culminates in the act of parliamentary elections – the decisive act for the formation of the political will in the state (BVerfGE 14, 121 <132>). A distinction must be made between the formation of the political will of the people on the one hand, and the formation of the political will of the state by its organs. The Basic Law builds on this distinction. Art. 21(1) of the Basic Law addresses the formation of the will of the people, while Art. 20(2) of the Basic Law concerns the formation of the will of the state (BVerfGE 8, 104 <113>). Only if the people themselves exercise state authority as a constitutional organ or as an organ that creates organs of the state (Kreationsorgan) through elections and votes (Art. 20(2) of the Basic Law), does the expression of the will of the people coincide with the formation of the will of the state (cf. BVerfGE 8, 104 <113>).

116

However, the people do not solely express their political will through elections and votes. The right of citizens to participate in the formation of the political will is not only reflected in the act of voting in elections, but also extends to influencing the ongoing process of political opinion-forming, i.e. the formation of ‘public opinion’ (cf. BVerfGE 8, 51 <68>). Public opinion […] influences the decisions taken by state organs. Furthermore, groups, associations and societal entities that take different forms try to influence the measures adopted by the government and the decisions made by legislative bodies in the interest of their members. Yet in between elections, it is primarily political parties that influence the decisions of constitutional organs, in particular parliamentary decisions, to reflect the opinion of the people that they have helped shape; they also influence the formation of the state will (cf. BVerfGE 3, 19 <26>; 5, 85 <134>; 14, 121 <133>). The people can influence the decisions taken by constitutional organs between elections by way of political parties, whose internal structures must adhere to democratic principles. Public opinion and the will of the people are formed through a complex and multimodal process, which is characterised by a web of influences between various interrelated and interdependent factors.

117

The formation of the will of the people and of the state are intertwined in diverse ways. In a democracy, the formation of the will must be a bottom-up process from the people to the state organs, rather than a top-down process from the state organs to the people. State organs are created by the very process through which the political will of the people is formed, which culminates in elections (Art. 20(2) of the Basic Law). This means that state organs are in principle barred from involvement in the process through which public opinion and the political will of the people are formed, and that this process must in principle remain free from interference by the state. Legislative, executive and administrative interventions in this process are only compatible with the democratic principle of the free and open formation of public opinion and of the political will, as a bottom-up process from the people to the state organs, if they can be justified by a special, constitutional reason.

118

For example, influencing the formation of the will of the people is permissible if such influence arises from the constitutional design of electoral law. Moreover, so-called public outreach work by the government and legislative bodies is not objectionable, provided that they set out and explain to the public, in relation to the activities of their state organ, their policies, measures and projects as well as issues to be resolved in the future.

119

b) The relationship between constitutional organs and political parties is governed by the constitutional requirement that the formation of public opinion and of the political will must in principle be open and free from state interference, as a bottom-up process from the people to the state organs.

120

aa) When it comes to the financial relations between the highest constitutional organs and political parties, the state is not required to ensure that the financial needs of political parties are met. It is likewise not required to compensate political parties, through financial or other measures, for their various possibilities of influencing the process through which public opinion and the political will of the people are formed (cf. BVerfGE 8, 51 <65, 68>; 14, 121 <134>).

121

No obligation of the state to financially support political parties can be derived from the fact that political parties perform the role of a constitutional organ if they participate in the process through which the will of the people is formed (BVerfGE 4, 27 <30 f.>; 5, 85 <134>; 6, 367 <372, 375>); nor does such a state obligation follow from the fact that political parties have been explicitly referred to as state organs or constitutional organs which, in the view of the constitutional law scholar Georg Jellinek, are instrumental in creating other state organs (BVerfGE 1, 208 <225>; 12, 276 <280>). Art. 21 of the Basic Law recognises parties as institutions that are necessary under constitutional law for the formation of the political will of the people, and has elevated their status to that of a constitutional institution (cf. BVerfGE 11, 266 <273> […]). Yet political parties do not form part of the highest state organs (BVerfGE 1, 208 <225>; cf. also BVerfGE 13, 54 <81, 95>). Rather, they are freely formed groups rooted in the socio-political sphere (BVerfGE 1, 208 <224>; 3, 383 <393>), with the responsibility to participate in the formation of the political will of the people and to influence the sphere of institutionalised statehood. As they are not part of this sphere themselves, the state is under no obligation to finance them.

122

bb) Political parties primarily participate in the formation of the political will of the people through their involvement in elections, which could not be conducted without the parties (BVerfGE 4, 27 <30>; 8, 51 <63>; 12, 276 <280>; 13, 54 <81>; 14, 121 <132>). They also serve as links between the individual and the state ([…]), as instruments through which the will of the people can be realised between elections, as a mouthpiece of the people (BVerfGE 1, 208 <224>). Insofar as they support the government, they provide and maintain the link between the people and the political leadership. As parties of the minority, they form and give effect to the political opposition. They are involved in the process of public opinion-forming as intermediaries. Political parties collect and channel the opinions, interests and endeavours related to political power and its exercise, harmonise and shape them and try to give effect to them in the formation of the political will of the state (cf. BVerfGE 8, 104 <113> […]). In a modern mass democracy, political parties exert significant influence on the appointment of the highest state officials (BVerfGE 13, 54 <81>). They influence the formation of the will of the state by having an impact on the system of state institutions and offices, in particular by influencing the decisions and measures adopted by Parliament and by the government.

123

The constitutional requirement that the formation of public opinion and of the political will must in principle be open and free from state interference, as a bottom-up process from the people to the state organs, precludes any entrenchment of political parties in state institutions and their integration into the sphere of organised statehood, precisely because of their activities ([…]).

124

It is generally accepted that covering the financial needs of parties through public funds, either fully or for the most part, would be incompatible with the Basic Law. While partial state funding of political parties by way of annual or monthly payments for all of their political activities would not integrate them into the sphere of state organs, it would intertwine them with this sphere and make them subject to state provision. Such funding would mean that state organs influence the process through which public opinion and the political will are formed. Such influence is not based on special grounds that could provide legitimation under constitutional law. The financing of political parties provided for in the Federal Budget Act 1965 is therefore unconstitutional; it is irrelevant in this respect whether it encroaches on parties’ freedom from state interference guaranteed by Art. 21 of the Basic Law or on the principle of equal opportunities of political parties.

125

(1) Providing state funding to political parties for all of their political activities cannot be justified on the grounds that Art. 21 of the Basic Law recognises political parties as constitutionally necessary instruments for the formation of the political will of the people and has elevated their status to that of a constitutional institution. Since the process through which public opinion and the political will are formed must in principle remain free from interference by the state, the constitutional recognition of political parties’ participation in this process as such is not capable of justifying intervention by constitutional organs through the financing of political parties.

126

(2) Providing state funds to political parties for all of their political activities cannot be justified on the grounds that political parties would not be capable of performing their tasks if they did not receive state funding. Such objection implies doubts as to the ability and willingness of citizens to themselves create and maintain organisations that are necessary for the people to properly express themselves and to make political decisions (cf. BVerfGE 1, 208 <224>). This would call into question the foundations of the democratic state order on which the Constitution builds; these still exist, despite there being citizens who dislike or are indifferent to political parties due to historical factors or the current social, economic and political circumstances. It also cannot be proven that political parties would not have been able to perform their tasks without the partial state funding that they have received since 1959. The Constitution has not relieved the parties of the risk of failure in their own efforts to secure funding. In principle, a free democracy accepts the risks resulting from the fact that the formation of the political will is entrusted to the judgment and activities of citizens.

127

(3) The fact that members of Parliament receive remuneration and that parliamentary groups receive grants from the state budget cannot serve as a premise to infer the permissibility of providing annual grants to political parties for all of their political activities.

128

Members of Parliament hold public office (Art. 48(2) first sentence of the Basic Law). Parliamentary remuneration serves to guarantee that they can decide freely – including vis-à-vis their parliamentary group and party – and to enable them to freely exercise the rights and obligations arising from their constitutional status as representatives of the people (Art. 38(1) second sentence, Art. 48(3) first sentence of the Basic Law). The right to remuneration of members of Parliament forms part of substantive parliamentary law. Such remuneration is explained and justified by the principles of a ‘liberal-representative democracy’ (BVerfGE 4, 144 <150 f.>). Historically, remuneration for members of Parliament was enshrined in the Prussian Constitution (Preußische Verfassung) of 31 January 1850, in other Land Constitutions at the time and in § 95 of the Frankfurt Constitution (Frankfurter Reichsverfassung) of 1849 […].

129

Similarly, the permissibility of state funding of political parties cannot be derived from the fact that the parliamentary groups receive grants to cover their expenses incurred in the context of their parliamentary work ([…]). Parliamentary groups are parts and permanent structures of the Bundestag; they are recognised in its Rules of Procedure and have their own rights. As organisations performing Bundestag activities as laid down in the Constitution and the Bundestag Rules of Procedure, they are necessary elements of the constitutional order. Their task is to control the technical aspects of parliamentary work, up to a point, and thus facilitate it (BVerfGE 1, 208 <229>, 351 <359>; 2, 143 <160, 167>, 347 <365>; 10, 4 <14>). Parliamentary groups can have legal ability to file an application in Organstreit proceedings only because they are permanent structures of the Bundestag, and not because they are ‘part’ of a political party. As structures of the Bundestag, they are integrated into organised statehood. Therefore, they can be granted state funding.

130

It is true that parliamentary groups have close links to political parties and that political parties influence state decisions, i.e. the appointment of the highest state officials (BVerfGE 13, 54 <81>) and decisions of Parliament and the government (cf. BVerfGE 3, 19 <26>; 14, 121 <133> […]), primarily by way of parliamentary groups and their members. Yet this does not alter the fact that parliamentary groups, unlike political parties, form part of the sphere of state organs (cf. BVerfGE 1, 208 <225>).

131

That said, it would constitute an abuse in violation of the Constitution if Parliament approved a level of grants to parliamentary groups that was not justified by the needs of the parliamentary groups and thus amounted to hidden state funding of political parties.

132

(4) Re-examination of the matter has shown that state funding for all of the political activities of a party also cannot be justified by the fact that such funding serves to increase the ability of a political party to perform its tasks independently of extraneous sources of financing (cf. BVerfGE 12, 276 <280> and the decision of a committee of the Second Senate of 22 June 1960, BVerfGE 11, 239 <243>).

133

Art. 21 of the Basic Law guarantees that political parties are free from state interference, but it does not protect them from the influence of well-resourced individuals, companies or associations. The requirement for political parties to publicly account for the sources of their funds, laid down in Art. 21(1) fourth sentence of the Basic Law, shows that the Basic Law neither approves nor prohibits the influence on political parties frequently sought with major private donations, but rather considers it to be a common form of pursuing political interests (cf. BVerfGE 5, 85 <232 f.> and 12, 113 <125>), provided that such donations are disclosed. It is not in line with the purpose of the provision to distinguish between inadequate and adequate sources of financing. Under constitutional law, no feasible distinction can be made between donors’ legitimate influence and influence that disrupts the free formation of the political will. It is for the political parties to distinguish between inadequate and adequate influence of donors and to resist undue pressure ([…]). The Constitution does not guarantee that political parties will be free from such pressure. It should also be noted that not all major donations involve an attempt to influence the decisions of a political party.

134

In providing for the requirement to account for party funds, the constitutional legislator intended to ‘ensure that the public knows about the sources of party funds so that it is clear who is behind a political group’ (see the written reasons to the application, document 897, of representatives Wagner and Zinn, adopted by the Parliamentary Council on 8 May 1949 as Art. 21(1) fourth sentence of the Basic Law […]). This provision serves to counter the risk that anonymous stakeholders can, through their financial clout, ‘direct public opinion, by way of party coffers (...), and thus indirectly develop enormous political power’ ([…]) and influence the formation of the state will. The constitutional requirement aims to make the process through which the political will is formed transparent to voters, disclosing which groups, associations and individuals try to exert political influence on political parties through donations. It is designed to disclose donations through which well-resourced donors increase a party’s possibilities for advertising, thereby strengthening their own political influence, and to make such conduct subject to public scrutiny. It also serves to ensure equal opportunities of political parties ([…)]. However, this is not sufficient for the legislator to fulfil its constitutional mandate.

135

(5) The parties are required to account for the sources of party funds in order to uphold their constitutional function of participating in the open and free formation of the political will of the people. By contrast, there is no such constitutional requirement for groups, associations or other societal entities. The Constitution does not provide for any rules regarding the financing of such groups. Therefore, the continual disbursement of state funds to political parties cannot be justified on the grounds that the state provides considerable subsidies to other groups and organisations in society. It is true that, in aggregating interests, such associations also influence political opinion-forming and the decisions of state organs. The free exercise of organised group interests vis-à-vis the state and political parties is part of the freedom of action granted to such associations in Art. 9 of the Basic Law. Unlike political parties, however, they are not political ‘organs that create state organs’ ([…]; BVerfGE 1, 208 <224>; cf. also BVerfGE 17, 155 <166>). They receive financial assistance by the state for economic, social and cultural purposes, which have been determined by the responsible state organs. Such financial assistance does not affect the principle that the democratic formation of the political will must be a free and open bottom-up process from the people to the state organs. By contrast, the financial support of political parties provided for in the Federal Budget Act 1965 does affect this principle. Thus, no justification for providing financial support to political parties can be derived from the permissibility of providing financial support to societal groups and associations.

136

1. The permanent financing of political parties from state funds for all of their political activities is incompatible with the guiding principle of political parties, on which the constitutional legislator based its reflections and which is set forth in Art. 21 of the Basic Law. This provision serves to resolve the conflict that had developed under the Weimar Constitution between political reality and written constitutional law (cf. BVerfGE 1, 208 <225>). Yet Art. 21 of the Basic Law did not intend to change the traditional structure of political parties as freely competing groups operating on their own accord; it bars the state from making their financial security a task of the state.

137

a) The Weimar Republic has been described as a multi-party state (cf. BVerfGE 1, 208 <223 f.>). […]

138

b) Under the Nazi regime, political parties were prohibited and broken up, or they dissolved. […]

139

c) With Art. 21 of the Basic Law, the constitutional legislator decisively rejected the system of Nazi rule and incorporated the legal status of political parties in the newly created parliamentary democracy (Art. 21(1) first sentence and (2) of the Basic Law). At the same time, the constitutional legislator drew the necessary conclusions from the development of National Socialism, its support by well-resourced entrepreneurs and the collapse of the multi-party system in 1933, and provided for safeguards in relation to political parties that serve to protect liberal democracy. This purpose is served not only by the provision on unconstitutional parties in Art. 21(2) of the Basic Law, but also by the requirement that their internal organisation must conform to democratic principles (Art. 21(1) third sentence of the Basic Law) and that political parties must publicly account for the sources of their funds (Art. 21(1) fourth sentence of the Basic Law). The constitutional legislator provided for these restrictions to the freedom of political parties for the sole purpose of safeguarding the free and democratic basic order. Apart from that, it was guided by the model of a free multi-party system that is independent from the state in every respect, like the one developed under the Weimar Constitution.

140

The Basic Law’s legislative history does not provide any indications that the Constitution was intended to deviate from the traditional model of free political parties that operate on their own accord and to confer on the state the task of permanently securing the financial stability of political parties.

141

According to the report of Sub-Committee I of the Constitutional Convention at Herrenchiemsee of 20 August 1948, there was ‘agreement that the Basic Law could not ignore the reality of political parties. While they cannot be considered organs in the legal sense of the word, they are a fixture of political life’ ([…]). The Parliamentary Council followed these notions. It adopted a specific ‘article on political parties’ in order to enshrine the political reality of the multi-party state in written constitutional law and to create the necessary safeguards against risks to democracy; at the same time, in recognising that political parties are free entities, the legislator intended to ensure their independence from state organs. […]

142

d) Thus, the key concept underlying the considerations of the constitutional legislator was that political parties are formed freely in an open multi-party system, develop of their own accord, and participate in the formation of the political will of the people, depending on their abilities, subject to the obligations of Art. 21(1) third and fourth sentence of the Basic Law and in the context of the free and democratic basic order (Art. 21(2) of the Basic Law). The constitutional legislator’s notion of free and independent parties has been sufficiently specified in the wording of Art. 21 of the Basic Law, in particular in Art. 21(1) second to fourth sentence. The notions of the constitutional legislator are all the more significant for the interpretation of Art. 21 of the Basic Law as it follows therefrom, in the context of the objective contents of the provision, that the constitutional legislator created safeguards in light of certain historical experiences in order to prevent a repeat of such disastrous developments. Based on its legislative history, Art. 21 of the Basic Law can be understood as a response to the development of the multi-party system at the end of the Weimar Republic and under the Nazi regime. The provision is intended to uphold the free and democratic order by countering undemocratic developments in the multi-party system. At the same time, in order to safeguard a free multi-party system, it precludes interdependence between political parties and constitutional organs, and prohibits making permanent financial support of the parties a task of the state. Political parties that receive such financial support from the state are incompatible with the concept of free political parties put forward by the constitutional legislator and set forth in Art. 21 of the Basic Law. A statutory framework that provides for such financial support for all of the political activities of a political party are therefore unconstitutional for this reason, too.

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3. The state funding for political parties provided for in the Federal Budget Act 1965 is incompatible with the constitutional requirement that the formation of public opinion and of the political will must in principle be free from state interference (Art. 20(2), Art. 21(1) first sentence of the Basic Law). It is also incompatible with Art. 21(1) of the Basic Law, which sets forth that political parties operate on their own accord and are independent from the state. The provision under review is therefore void. There is no need to decide here whether this provision is unconstitutional for other reasons, too, in particular on the grounds of a violation of the requirement that the internal organisation of political parties must adhere to democratic principles (Art. 21(1) third sentence of the Basic Law).

III.

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Political parties also may also not receive state funds for political education initiatives. The taking of evidence has confirmed that no distinction can be made between general party activities and parties’ political education initiatives.

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While the treasurer of the Sozialdemokratische Partei pointed to characteristics with the help of which political education initiatives could be separated, in terms of substance and organisation, from general party activities, he did concede that it was ultimately left to the goodwill of the parties to separate the two tasks. The treasurers of the Christlich Demokratische Union, the Christlich-Soziale Union and the Freie Demokratische Partei agreed that no sufficiently certain distinction could be made between political education initiatives and general party activities. The representatives of the other political parties – with the exception of the representative of the Sozialdemokratische Partei – expressed the same view.

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In political practice, political education initiatives and general campaigning do become intertwined. Today, no party can refrain from discussing general questions of government policy and campaigning for its solutions among voters. Therefore, funds used for political education initiatives benefit a party’s political work in its entirety. For the aforementioned reasons, it is also incompatible with the Constitution to provide political parties with funds from the state budget for their political education initiatives.

IV.

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1. In light of Arts. 21 and 20(2) of the Basic Law, it is impermissible for the state to provide ongoing grants to political parties for all of their political activities. That said, based on the principles of the freedom and equal opportunities of political parties, it can be constitutionally justified to reimburse political parties for necessary campaign costs, provided that these are within reasonable limits. In this regard, reference is made to the judgment of 24 June 1958 (BVerfGE 8, 51).

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Parliamentary elections constitute the decisive act for the formation of the political will in a democracy. The constitutional legislator opted for a representative democracy, with parliamentary elections that must be held periodically to give the people, from which all state authority is derived, the opportunity to express their will. Holding elections is a public task incumbent upon the state organs. They must create the necessary framework and provide the necessary facilities and resources for elections.

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Yet elections could not be held without political parties in a modern mass democracy (BVerfGE 8, 51 <63>; 13, 54 <82>). It is primarily through elections that citizens determine the value of the programme of a political party and its influence on the formation of the will of the state (BVerfGE 3, 19 <26>; 13, 54 <83>; 14, 121 <133>). Citizens cannot make an informed decision in this regard unless the programmes and aims of the different parties are explained in an election campaign. It is only because of the election campaign that many voters opt to go to the polls and make their decision. The Court repeatedly emphasised that the primary purpose of political parties is to serve as organisations preparing elections (BVerfGE 8, 51 <63>; 12, 276 <280>) and that they are mainly involved in the formation of the political will of the people by participating in parliamentary elections (BVerfGE 4, 27 <30>; 8, 51 <63>). Based thereon, the Court held in its established case-law that political parties can lodge an application in Organstreit proceedings if they act in the context of elections and want to defend their special constitutional status vis-à-vis constitutional organs in this area (BVerfGE 4, 27 <30>; 7, 99 <103>; 13, 1 <9 f.>). Yet the Court only granted the possibility of lodging an application in Organstreit proceedings to political parties when their rights relating to elections are concerned.

150

Political parties participate in the formation of the political will of the people. That said, they do not have a monopoly on influencing the formation of the will of the people. In addition to political parties, individual citizens, groups, organisations and other associations also influence the process through which public opinion and the political will are formed. Yet it follows from Art. 21 in conjunction with Art. 38 of the Basic Law and from the Federal Elections Act, which forms part of substantive constitutional law, that political parties take priority over associations when it comes to the formation of the will of the people through parliamentary elections. While the activities of political parties are not limited to their participation in parliamentary elections, this task, conferred on them by Art. 21(1) of the Basic Law, is particularly prominent and of great significance, since it is absolutely necessary and crucial for the proper functioning of the democratic order as such.

151

The ongoing process of the formation of public opinion and of the political will culminates in the election campaign and the election. Election campaigns can be separated from this ongoing process. Activities of political parties in the context of election campaigns can be distinguished from their other activities. Election campaigns are only conducted in the run-up to elections; they are limited in time. Therefore, the costs of election campaigns can be determined in principle. The expenses incurred by political parties in election campaigns can be separated from their other expenses. During the taking of evidence, the treasurers of the four parties represented in the German Bundestag stated the additional income and expenditure of their parties in the election years 1957, 1961 and 1965, thereby confirming that these expenses can be determined separately.

152

The special significance of political parties for elections makes it appear constitutionally justified for the state to reimburse them for necessary campaign costs within reasonable limits. That said, it is a question of constitutional policy – which is not for the Court to decide – whether the legislator should provide for such reimbursement of campaign costs.

153

2. The Federation’s legislative competence to enact such statutory provisions follows from Art. 21(3) of the Basic Law.

154

[…]

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3. Only actual expenses that are directly linked to the election campaign can be reimbursed. Parties’ running costs for maintaining their permanent organisation and the expenses for activities that do not directly serve the election campaign cannot be reimbursed. In terms of determining the expenses incurred by a party for the election campaign, those services which are usually provided to the parties free of charge must not be counted towards these expenses. Any political party that is free and operates on its own accord will naturally have deputies, members and adherents who work for the party without being compensated.

156

With regard to the overall amount of campaign costs to be reimbursed, only those costs can be reimbursed that, under the political, economic and social circumstances, serve to appropriately present a party’s agenda and to foster the necessary debate in the parties’ competition for political power. It is irrelevant what expenses each party considers to be appropriate for its election campaign. Rather, the legislator must aim to use an objective standard.

157

It would also be unobjectionable under constitutional law if the legislator were to set a framework under which parties were only reimbursed for a certain percentage of the necessary campaign costs and it were up to them to pay for the rest themselves.

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4. If the legislator provides for reimbursement of campaign costs, it must respect the freedom guaranteed to political parties by Art. 21 of the Basic Law (cf. BVerfGE 9, 162 <165>; 12, 296 <305>; 14, 121 <133>; 17, 155 <166>). It will also have to ensure that its distribution key does not run counter to the principle of equal opportunities of political parties. This principle not only applies to electoral law in the narrow sense (BVerfGE 1, 208 <242, 255>; 6, 84 <90>), the preparation of elections (cf., e.g., for the approval of nominations BVerfGE 3, 19 <26 f.>; 3, 383 <393>; 4, 375 <382 f.>), the competition between political parties for donations (BVerfGE 6, 273 <280>; 8, 51 <64 f.>) and campaign advertising on the radio and on television (BVerfGE 7, 99 <107 f.>; 14, 121 <132 f.>); it also applies to the entire ‘run-up’ to elections (cf. BVerfGE 8, 51 <64 f., 68>; 14, 121 <132>), which means that it also applies to statutory provisions governing the reimbursement of campaign costs. In all of these areas, this principle must be understood in a strictly formal way. Legislative leeway is therefore strictly limited in this area. The Constitution precludes any differences in treatment of political parties that is not justified by a particular, compelling reason (BVerfGE 8, 51 <64 f.>; 14, 121 <133>).

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It is not for the Court to set out how a constitutional framework could or ought to be designed. The Court therefore limits itself to pointing out, on the basis of its established case-law, where the principle of equal opportunities sets limits to the legislator’s leeway.

160

a) The decision that political parties can be reimbursed from state funds for necessary campaign costs in the context of reasonable Bundestag election campaigns determines who is eligible for the funds provided by the state: only parties that participated in the election campaign. However, the principle of equal opportunities, understood in a strictly formal way, requires that all parties that participated in the election campaign are in principle taken into account when the funds are distributed. It would run counter to the principle of equal opportunities if these funds, from the outset, were only provided to parties that have already been represented in Parliament or that have received seats in Parliament following the election. Yet this principle does not preclude any differentiation; it permits differences in treatment of political parties for particular, compelling reasons. Such reasons must be found to exist if the legislator aims to counter the risk of excessive fragmentation of votes and parties when reimbursing campaign costs.

161

It is likely that the reimbursement of campaign costs is capable of encouraging the formation of new political parties. This would further a development which has been counteracted by the five percent threshold recognised by the Federal Constitutional Court (BVerfGE 1, 208 <248, 256>; 4, 31 <40>; 4, 142 <143>; 4, 375 <380>; 5, 77 <83>; 6, 84 <92 ff.>; 14, 121 <135>). Yet the legislator can avoid the fragmentation of votes and the formation of splinter parties during the election and restrict the reimbursement of campaign costs accordingly. That said, the reimbursement of the campaign costs of a party cannot depend on the party having received [at least] five percent of votes cast. This measure would considerably reinforce the effect of the five percent threshold and make it practically impossible for a new party to enter Parliament. On the other hand, the prerequisites laid down in the Federal Elections Act for the participation of a new political party in elections are not sufficient to prevent abuse in the form of some splinter groups only participating in election campaigns because these are financed by the state. The legislator may therefore opt to only reimburse campaign costs if a party has received a minimum share of votes cast. This share must be substantially lower than the five percent threshold that is necessary to gain seats in Parliament.

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b) With regard to the amount of campaign costs incurred by a party to be reimbursed, too, a differentiation within certain limits will be compatible with the principle of equal opportunities of political parties. The Federal Constitutional Court’s case-law on the allocation of broadcasting time on the radio and on television for party campaign advertising can provide guidance in this regard (BVerfGE 14, 121 <134 ff.>). Political parties differ in terms of their size, political clout and capabilities – i.e., in terms of their – changing – significance. The way in which a party conducts its campaigns, in particular its choice of advertising media and the efforts it makes with advertising, is to some extent related to the size and political clout of a party. The principle of equal opportunities does not require that these differences be levelled through state measures (cf. BVerfGE 8, 51 <67>; 14, 121 <134>). It would run counter to the purpose of state reimbursement of campaign costs if all parties participating in elections were put in a position to make the same campaign efforts, regardless of their significance and their potential in terms of their politicians, ideals and material resources. This would distort the actual competitive situation. By contrast, the legislator should not reinforce any existing de facto inequalities regarding the opportunities of political parties (cf. BVerfGE 8, 51 <67>). If the legislator provides for the reimbursement of campaign costs in the future, it will be able to base such reimbursement on a comparison of the parties’ past expenditure levels. That said, with regard to the expenditure of parties not represented in the Bundestag, the legislator will have to take into account that they have not received any state funding so far. This distribution method, which is merely intended to suggest a basis for the legislative framework, will have to be extended accordingly to newly emerging parties that participate in future election campaigns. The legislator will have to examine whether further aspects must be taken into account for a differentiation between parties that is compatible with the principle of equal opportunities and whether these may result in modified distribution keys.