New Title: German Government Declines to Join Economic Stabilization Program

Germany’s Chancellor Olaf Scholz, Finance Minister Christian Lindner, and Economy and Climate Minister Robert Habeck appeared at a hearing at the lower house of parliament, the Bundestag, in Berlin on November 15th. According to a source close to the finance ministry, the government has halted spending from the economic stabilization fund for this year after a constitutional court ruling last week.

The ruling prohibited the transfer of 60 billion euros from unused funds from the pandemic to green projects. The government is working urgently on a response to this court ruling. Werner Gatzer, state secretary at the finance ministry, stated in a letter on Tuesday that credit authorizations for the economic stabilization fund cannot be used in 2023 under current legal circumstances. All unspent funds are now blocked and require approval from the finance ministry before any further spending can occur.

The budget committee had previously approved such spending. However, payments related to the energy price brake for this year remain unaffected by the ruling. The economic stabilization fund was created in 2020 to support companies during the pandemic but has since shifted its focus to addressing the energy crisis. Handelsblatt business daily was first to report on this decision by government officials to block spending from this fund for 2023.

As a result of this court ruling and blocked spending from the economic stabilization fund for 2023, Germany’s government is working diligently to address these implications and find ways to adapt its policies accordingly while still fulfilling its obligations under current legal circumstances.