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BERLIN (AP) — Germany’s most sensible court on Wednesday overturned a government ruling to reallocate 60 billion euros ($65 billion) meant to cushion the fallout from the coronavirus pandemic to measures to combat climate change and modernize the country. a new challenge for Chancellor Olaf Scholz’s feudal coalition.
The money at stake was retrospectively added to the 2021 budget in light of the COVID-19 pandemic, under regulations allowing for new loans in an emergency despite Germany’s strict debt restrictions.
But in the end this was not mandatory for this purpose, and Scholz’s centre-left tripartite coalition in 2022 invested the money in the “climate and transformation fund”, arguing that investing in measures to protect the climate would help the economy. recovering from the pandemic. It has not yet been used.
MPs from the main conservative opposition bloc claimed it was a ploy to circumvent Germany’s so-called “debt brake”, and 197 of them filed lawsuits with the Federal Constitutional Court.
The court ruled that the government’s resolution was unconstitutional and said it would have to look for other tactics to close the resulting loophole in the climate fund.
The debt brake, introduced more than a decade ago, meant new indebtedness amounting to just 0. 35% of annual gross domestic product.
It can be suspended to address natural errors or other emergencies beyond the state’s control, and was suspended for three years from the start of the coronavirus pandemic in 2020 to allow for large loans to fund various recovery programs.
Finance Minister Christian Lindner and his pro-business Free Democrats have been especially adamant in their desire to save money to meet borrowing rules, and the coalition also agreed, despite his insistence, not to raise taxes when he took office in late 2021. .
The reversal is one of many sources of tension between the partners in a coalition that also includes Scholz’s Social Democrats and the Greens, and is known for its infighting.
Scholz, Lindner and Vice Chancellor Robert Habeck, a member of the Green Party and also economy and climate minister, sought unity after the decision and pledged in a joint appearance to examine it carefully. Scholz said the government is making plans to “rapidly rework” the weather fund’s plans.
Meanwhile, Lindner said he has temporarily frozen existing plans for the fund for the coming years, that measures to promote energy power will be exempted and that the use of renewable energy in buildings will be exempted.
The government had allocated some 211. 8 billion euros to the climate fund over the next four years. This includes a budget to help expand the hydrogen industry, rail infrastructure, assist in the transition to electric vehicles and renovate buildings. Its other investment resources come with income from emissions trading.
Martin Kaiser, executive director of the German branch of the environmental group Greenpeace, called Wednesday’s resolution a “major setback for climate protection” and criticized the government for trying to finance the transformation of the climate-neutral economy with “financial tricks. “
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