60 Billion Euros

are suddenly missing in Germany's upcoming federal budgets. The decision of our Federal Constitutional Court (Bundesverfassungsgericht) was a big bang. The story behind it is long, but I'll make it short.

In 2011, parliament introduced a so-called Schuldenbremse* to stop overboard federal spending. Future generations have to pay back more and more debts, although every head of a family has internalized: "You cannot spend more than you earn."
*The brake on debts is only remotely similar to the debt ceiling in the States

The deputies took it seriously and wrote the debt brake on national spending into Germany's constitution. Only in case of an emergency could federal spending be increased.

Such an emergency was the Corona epidemic. Parliament authorized the government to create a  Sondervermögen (special fund) of 100 billion euros to cushion the economic consequences of the Corona crisis.

In the end, only 40 billion euros were called upon. So, in bypassing the debt brake, the traffic light coalition government reallocated the remaining money to a climate and transformation fund to finance Germany's green future.

Vice President of the Federal Constitutional Court Judge Prof. Dr. Doris König (third from right)
before the pronouncement of the judgment (©phoenix)

On November 15, the Federal Constitutional Court ruled that this reallocation was unconstitutional. Once money has been earmarked by parliament, it cannot be recommitted by the government. Suddenly, 60 billion euros are down the drain.

©TAZ

Following the Federal Constitutional Court's verdict, Federal Economics Minister Dr. Robert Habeck (Green Party), Federal Chancellor Olaf Scholz (Social Democrats[Red]), and Federal Finance Minister Christian Lindner (Liberals[Yellow]) met the press in a daze (bedröppelt).

Given the sudden huge financial gap, the government has no plan B. As a first measure, the traffic light coalition imposed a spending freeze on the climate and transformation fund.

That won't be sufficient.
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