Chancellor Olaf Scholz, along with Finance Minister Christian Lindner and Economy and Climate Minister Robert Habeck, spoke at a hearing in Germany’s lower house of parliament Bundestag in Berlin on November 15, 2023. A source close to the finance ministry stated that the German government has suspended spending from the country’s economic stabilisation fund for this year after a recent constitutional court ruling. This ruling prohibited the government from transferring 60 billion euros in unused funds from the pandemic to green projects.
The government led by Chancellor Olaf Scholz is working to develop a comprehensive response to the court ruling. The ruling has blocked credit authorisations for the economic stabilisation fund (ESF) for the year 2023. In a letter to other ministries, finance ministry state secretary Werner Gatzer stated that according to the current legal situation, ESF funds cannot be utilized this year. To prevent adding further burden to the budget, all unspent spending plans for 2023 are immediately blocked and require the approval of the finance ministry.
The budget committee was previously able to grant approval, but now any unspent funds for this year require finance ministry consent. However, payments connected to the energy price brake for 2023 are not affected by the suspension of ESF spending. The stabilisation fund was initially intended to support companies during the coronavirus pandemic, but has since transitioned its focus to the energy crisis. The ESF move was first reported by the Handelsblatt business daily. The government’s response is ongoing as they navigate this legal challenge.