• Sun. Dec 3rd, 2023

German Government Turns Down Proposal for Economic Stability Program


Nov 21, 2023

On November 15, 2023, Chancellor Olaf Scholz, Finance Minister Christian Lindner, and Economy and Climate Minister Robert Habeck appeared at a hearing at Germany’s lower house of parliament Bundestag in Berlin. According to a source close to the finance ministry, the government has stopped spending from the economic stabilisation fund for the year after a constitutional court ruling last week.

The court ruling prohibited the transfer of 60 billion euros in unused funds from the pandemic to green projects. The government is now urgently working on a response to the ruling. Werner Gatzer, state secretary at the finance ministry, stated in a letter on Tuesday that credit authorisations for the economic stabilisation fund can no longer be used in 2023 under current legal conditions. All spending that has not been used in 2023 is now blocked and requires the consent of the finance ministry.

Prior to this ruling, payments related to energy price brakes were still allowed by the budget committee for this year. However, all other spending from the ESF is now blocked until further notice. The Handelsblatt business daily was first to report on this decision made by the government officials.

As they work towards addressing implications of this court ruling and blocked spending from ESF for this year, it remains unclear what steps will be taken next by this government agency created in 2020 specifically for supporting companies during pandemic but has since shifted its focus towards addressing energy crisis challenges faced by these companies today.

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