Receive timely updates for free by signing up for the German politics myFT Digest. The German government has indefinitely suspended a vote on the country’s 2024 budget, worsening the constitutional crisis over fiscal policy in the eurozone’s largest economy. MPs representing the coalition parties have canceled the vote in response to the highest court’s declaration that government plans to move €60bn to a climate fund broke fiscal rules. This ruling has significant implications for other spending commitments, with pressure from the opposition party causing the budget crisis to be fully debated by parliamentarians.
With the German parliament set to close on December 15, the government could struggle to push through a vote this year, resulting in automatic restrictions on spending across all federal government departments. Last week, plans for the government to transfer funds earmarked for the pandemic to its Climate and Transformation Fund were eviscerated by the courts, causing further uncertainty regarding other spending plans. The CDU, the opposition party, blames the government for bringing the crisis upon itself and supports cuts to social security and benefits to cover the cost of reforming the German military and continuing industry subsidies.
Despite the challenges, one way forward for the government would be for the Bundestag to vote to declare spending outside of the debt brake permissible in connection with an emergency, such as the war in Ukraine. Stay informed on the latest updates and developments in German politics with the myFT Digest delivered directly to your inbox.
