German Budget Crisis Deepens Amid Court Ruling and Economic Struggles

Chancellor Scholz to Outline Plan as Court Decision Threatens Up to 130 Billion Euros in Spending

Germany is facing a budget crisis due to a court decision that struck down billions in funding for clean energy projects and relief for companies and consumers facing high utility bills due to Russia's war in Ukraine.
Chancellor Olaf Scholz is expected to outline his government's plan to address the crisis, which could involve spending cuts that could further slow the world's worst-performing major economy.
The court's decision could affect up to 130 billion euros in expected spending through 2027, and the government is changing the 2023 budget by declaring an emergency, citing Russia's cutoff of natural gas supplies and higher energy prices.
Germany's constitutional court has voided some 60 billion euros ($65 billion) in spending for this year and next, stating that the government could not shift unused funding meant for COVID-19 relief to other projects.
Despite the budget crisis, Germany has the smallest long-term debt pile of any of the Group of Seven advanced democracies, with debt of 66% of gross domestic product.