German Court Rules Against Government's Reallocation of Pandemic Debt to Climate Fund

The decision heightens tensions in Chancellor Scholz's coalition and sets a precedent for Germany's fiscal maneuvers during financial crises.

Germany's Constitutional Court ruled that the government's decision to reallocate €60 billion ($65 billion) of unused pandemic debt to its climate fund was unconstitutional.
The decision is expected to heighten tensions in Chancellor Olaf Scholz's coalition, which has seen support slump due to a series of crises and public infighting.
The ruling could have significant implications for Germany's fiscal policy and the 2024 budget, potentially forcing the government to cut back on spending elsewhere.
The court's decision also sets a precedent for Germany's fiscal maneuvers during financial crises and could affect how the country finances its response to future crises.
The funds were intended to finance measures for climate protection, including support for the development of green technologies, renovation of old housing stock, and updating heating systems.