Germany’s constitutional court ruled on Wednesday that the coalition government’s decision to re-allocate 60 billion euros ($65.21 billion) of unused debt from the pandemic era to its climate and transformation fund was unconstitutional.
This is a key ruling as it sets a precedent for Germany’s fiscal responses in future crises, while it could also trigger tensions in the coalition in a key week for budget negotiations.
Germany’s 2024 budget and financial plans through 2027 are to be finalized on Friday, as Europe’s biggest economic power curbs spending that surged in response to COVID-19 and the Ukraine war.
The ruling of the constitutional court now puts additional pressure on budget deliberations.
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