Germany announced a plan to resolve a looming budget crisis on Thursday, proposing a resolution that would make it possible to fill a hole in its spending plans without requiring fresh debt. But details about the plan, which came amid growing unease about Europe's largest economy and rising tensions within the government's three-party governing coalition, were scarce.
The move came after days of uncertainty triggered by the ruling from the country's highest court that declared elements of the 2023 budget invalid because of a rule that limits borrowing. The so-called debt brake can be suspended only in times of emergency, and the government had suspended it the past three years because of the pandemic and surging energy prices following Russia's invasion of Ukraine. Mr. Lindner, who leads the fiscally conservative Free Democrats party, has vowed to abide by the borrowing limits for the 2023 budget. No new debt will be taken on, but the funds already used to overcome the crisis will be placed on a secure legal basis, Mr. Lindner said in a statement on Thursday. He did not elaborate.
Chancellor Olaf Scholz has faced growing turmoil since the court ruled that the money the government wanted to spend on green projects had to come from the regular budget effectively ripping a multibillion-euro hole in the government's plans. Economists and business leaders, as well as some lawmakers from Mr. Scholz's three-party coalition, demanded Mr. Li.
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