The Constitutional Court's verdict on November 15 was a political bombshell for Chancellor Olaf Scholz and his federal government. It ruled that the government cannot reallocate 60 billion euros meant to fight the COVID-19 pandemic to instead address climate change.
The court ruled this unconstitutional because it violates Germany's debt rules, the so-called 'debt brake' enshrined in the country's constitution. It restricts new debt to 0.35% of nominal GDP annually for the federal government and also banks it for Germany's regional states.
The ruling is a blow to Chancellor Olaf Scholz's government and its climate-friendly projects. The government had planned to use the reallocated funds to support energy-efficient refurbishment of buildings, electromobility, and modernize German Rail, among others.
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