Germany faces a serious problem: "Jobs are at Risk"

The Federal Constitutional Court in Germany has decided that 60 billion euros in unused loans are prohibited from being transferred to the climate fund, ruling that such a step would violate the basic law and infringe the debt brake. This could lead to Germany's economic downfall.

Recall that the coalition of SPD-Green-FDP had planned to reroute the 60 billion euros that were initially allocated to deal with the economic consequences of the pandemic towards the climate fund. However, the Federal Constitutional Court did not align with this perspective.

The German Federal Government expanded the 2021 budget by approving a loan of 60 billion euros. The exceptional circumstances brought on by the COVID-19 pandemic enabled this loan transference despite the debt brake.

It was ultimately determined that the funds were not required to combat the pandemic and its repercussions. The federal government, having gained the Bundestag's approval, retrospectively reallocated these funds into the 2022 climate transformation fund. Consequently, a group of 197 CDU deputies reached out to the court in Karlsruhe, highlighting the circumvention of the debt brake mechanism. The court found merit in their claims.

This judgment could jeopardize the German economy. The climate fund "serves to assure job and value creation".

If this is endangered, both job and value creation are at stake. The withdrawal of the industry injures our nation and society. Industry signifies labor, production, and the formation of value chains.

Marcel Fratzscher, the president of the German Institute for Economic Research, commended the court's verdict but underlined the "pressing requirement" for a reform of the debt brake.

He stated: "The federal governments' attempts to evade the debt brake over the last twelve years have grown increasingly nonsensical. The debt brake is now inadequate, since it restricts politicians' ability to combat crises and invest in the future."

Fratzscher believes that an investment offensive in education, climate protection, innovation, and infrastructure "is more critical than ever". Minister Habeck acknowledged that the federal government must seek alternative methods to fund investments in the industry. While a plan "B" exists within the government, its specifics have not been revealed.