November 15 (Xinhua) – Germany’s Federal Constitutional Court has declared the national government’s decision to reallocate 60 billion euros (64.8 billion dollars) from a COVID-19 relief fund to combat climate change measures as invalid.
The court ruled that the law used to move the funds to the Climate and Transformation Fund (CTF) in 2022 did not meet the constitutional requirements for emergency borrowing.
With Germany’s debt brake instrument, the government can only take on new debt in emergencies such as the COVID-19 pandemic. The court found that transferring the funds for another purpose circumvents this regulation.
The ruling added that the “de facto unlimited” continued use of emergency-related credit authorizations in subsequent financial years is “inadmissible.”
Now that the 60 billion euros will be withdrawn from Germany’s climate fund, financed projects will have to be covered by other budget resources.
Chancellor Olaf Scholz said on Wednesday that the Federal Government will closely observe the ruling by the Federal Constitutional Court. However, the 2024 budget meetings scheduled for Thursday are to take place as planned.
The CTF has a total budget of 211.8 billion euros for the next four years, with the German government aiming to invest 57.6 billion euros from the fund into green projects in 2024.
Germany, the largest economy in Europe, is working towards achieving climate neutrality by 2045, five years ahead of the European Union (EU) target. The country also aims to have an 80 percent share of renewable energies in its electricity supply by 2030, up from around 53 percent currently.
Martin Kaiser, managing director of Greenpeace Germany, described the ruling as a “bitter setback for climate protection,” and emphasized that all budgetary leeway must now be used in the transition to climate neutrality, “because we are already in the midst of the climate crisis.” (1 euro = 1.08 U.S. dollars)
