Budget chaos: Ministry of Finance also blocks economic stabilization fund

Enlarge image

Federal Ministry of Finance in Berlin

Photo: Kay Nietfeld / dpa

The ruling of the Federal Constitutional Court on the budget planning of the traffic light has consequences – not only for the Climate and Transformation Fund (KTF): Now the Ministry of Finance has also blocked the Economic Stabilisation Fund (WSF).

Because of the Karlsruhe decision, the WSF credit authorizations "could no longer be used in 2023 according to the current legal situation," according to a letter from State Secretary for Budget Werner Gatzer to the other ministries. The disbursement of the energy price brakes from the WSF this year is not to be affected by the spending freeze that has now been imposed.

The German government had provided the WSF with 2022 billion euros in 200 to cushion the energy crisis in the wake of the Ukraine war. Since then, the fund has been used to finance electricity and gas price brakes for consumers, as well as support measures for companies and important gas importers. At the time, Chancellor Olaf Scholz (SPD) described the crisis fund as a "double whammy".

For the financing of the WSF, which runs until mid-2024, the federal government used a procedure similar to that used for the KTF, the increase of which was declared inadmissible by the Federal Constitutional Court last week. As a result of the decision on the climate fund, the traffic light coalition now lacks 60 billion euros for projects for the energy transition in the coming years.

In response to the ruling from Karlsruhe on Monday evening, the Ministry of Finance had already imposed a spending freeze on large parts of the 2023 federal budget. Immediately after the verdict, the KTF was suspended.

Successful lawsuit against WSF would exacerbate budget crisis

In the event of another successful constitutional lawsuit, the credit authorizations from the WSF could also no longer be called up by the federal government. The budget crisis of the traffic light government would make this even worse. The government would then not only have huge money problems in the future - but also retroactively for the current year.The energy aid for consumers and companies alone, which flowed from the WSF in 2023, amounts to 31.2 billion euros by the end of October.

fek/AFP/Reuters