Update
No money for climate reserves
Karlsruhe overturns the traffic light supplementary budget
November 15, 2023, 10:06 a.m
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A bitter defeat for the traffic light coalition: The Federal Constitutional Court declares a supplementary budget to be invalid. It’s about 60 billion euros and money for a climate and transformation fund.
The Federal Constitutional Court has ruled that the federal government may not use funds intended to combat the Corona crisis for climate protection. The change to the supplementary budget for 2021 is unconstitutional, Germany’s highest court in Karlsruhe announced. It’s about the effectiveness of the debt brake, said the presiding judge of the Second Senate, Doris König, at the announcement. The Union faction in the Bundestag has successfully sued against the redeployment.
Despite the ruling, the traffic light coalition wants to stick to its budget preparation schedule for the coming year. SPD parliamentary secretary Katja Mast said in an initial reaction that she assumed that the budget committee would complete the draft budget on Thursday as planned and that it would then be passed by the Bundestag on December 1st. With regard to the verdict, she said the coalition was “prepared for this scenario.”
Due to the emergency situation during the corona pandemic, the federal government subsequently increased the 2021 budget by 60 billion euros in the form of a loan authorization. In such exceptional situations, it is possible to take out loans despite the debt brake. In the end, the money was not needed to deal with the pandemic and its consequences.
The current federal government made up of the SPD, Greens and FDP wanted to use the money for the so-called climate and transformation fund and, with the approval of the Bundestag, redeployed it retroactively in 2022. 197 members of the Union parliamentary group in the Bundestag filed a lawsuit in Karlsruhe because, in their view, the debt brake was being circumvented in this way.
Union insists on clear rules for the debt brake
The Second Senate had to deal with a new issue. Among other things, the issue was whether credit authorization can also cover the consequences of an economic crisis and when subsequent budget changes must be decided. Union parliamentary group vice-president Mathias Middelberg said at the oral hearing in June that the debt brake needed a real braking effect so that reserve funds were not repeatedly created and intended uses changed. Even in emergencies, it must be clear where the state’s scope for credit authorizations ends, added the Union’s representative, Karsten Schneider.
In contrast, government representatives argued that the national economy had weakened as a result of the pandemic and that private investments should also have been initiated. The reallocation of the money was intended to create some reliability for investments. At the same time as the negotiations, Federal Economics Minister Robert Habeck of the Green Party stated that a decision against the supplementary budget would hit Germany hard in terms of economic policy.
In an urgent decision in November 2022, the court gave the green light – also with a view to consumers. Because if the whole thing were stopped, but it later turned out to be unconstitutional, the damage in the form of electricity price increases, for example, would probably be great, the reason given was. In the other case – if everything continues as planned – the federal budget would be burdened with a maximum of 60 billion euros. The court announced that it can be assumed that this amount will not be used up until the decision on the main case is made.