Germany delays 2024 budget decision after court blow

AFP/The Local
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Germany delays 2024 budget decision after court blow
Chancellor Olaf Scholz (SPD) with Vice Chancellor Robert Habeck (Greens) and Finance Minister Christian Lindner (FDP) on November 15th. Photo: picture alliance/dpa | Kay Nietfeld

The German government on Wednesday pushed back the final vote on its budget for the coming year after a court ruling blew a huge hole in its spending plans.


Germany's top court last week said Chancellor Olaf Scholz's government had broken a constitutional debt rule when it transferred €60 billion earmarked for pandemic support to a climate fund.

READ ALSO: Why a German court struck down a €60 billion fund for climate change

A parliamentary session to agree the final budget for 2024 that was planned for next week would no longer take place, the coalition parties said in a statement.

The delay was needed "to take into account carefully" the consequences of the ruling for the government's spending plans, the parliamentary leaders of the Social Democrats, the Greens and the pro-business FDP said.

The aim was to "debate the budget quickly, but with the care necessary to create planning certainty" for next year's expenditure, they said.

The debt ruling has left the government forced to reevaluate its spending priorities and look for alternative ways to finance its plans or make new savings.

Following the court's decision, the government suspended most of the projects being financed through the climate fund and a imposed a broad freeze on new spending for the rest of 2023.


The new budget crunch has accentuated divisions between the parties over the right way to use its money and put a question mark over the value of Germany's strict spending rule.

Written into the constitution in 2009 under former Chancellor Angela Merkel, the debt brake caps new borrowing in Europe's top economy to 0.35 percent of gross domestic product.

The brake was suspended from 2020 to 2022 during the pandemic and energy crisis, but came back into force this year.


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