After the Federal Constitutional Court’s ruling against the climate fund, warnings are being raised that the German economy is at risk. The Federal Ministry of Economics fears slower growth.
Federal Minister of Economics Robert Habeck sees the competitiveness of the industry at risk following the Constitutional Court’s ruling against the Climate Fund (KTF). “The climate and transformation fund is a fund to secure value creation and jobs. It is industrial and workplace policy,” said the Green politician to the “Frankfurter Allgemeine Sonntagszeitung” according to the preliminary report.
The KTF was supposed to finance the switch to green chemistry, the ramp-up of hydrogen, battery cell production and semiconductor production. “If that is at risk, jobs and value creation are at risk.” German companies are on the way to transformation. “But they need support so that they can invest in our country.” Because it is clear that industry in other countries around the world is also concentrating on these future technologies, said Habeck.
Traffic light is not allowed to use Corona aid
The Federal Constitutional Court ruled on Wednesday that the diversion of 60 billion euros in unneeded Corona aid into the climate fund violates the debt brake in the Basic Law. The ruling is particularly problematic for the government because numerous projects – primarily from Habeck’s ministry, but also from other institutions – were to be financed with the KTF.
Among other things, a large part of the almost 40 billion euros that were announced for the expansion of the rail system should come from the KTF. But after a ruling by the Federal Constitutional Court this week, this pot is significantly smaller – and the search for alternative sources of financing has begun. Because now 60 billion euros are missing from the KTF, which had actually already been planned.
Another setback for the local economy
The Federal Ministry of Economics fears that the Federal Constitutional Court’s ruling could slow down growth in Germany. “According to initial estimates, a loss of investment funds could cause growth to be around half a percentage point lower in 2024,” the Reuters news agency learned from a person familiar with the ministry’s assumptions. “The ruling could therefore have a negative impact on economic growth,” it said.
Even before the court ruling, the EU Commission had seen Germany as bringing up the rear in terms of growth in the euro zone next year, with an expected increase of 0.8 percent. The federal government’s current economic forecast assumes an increase in gross domestic product (GDP) of 1.3 percent for 2024, after a contraction of 0.4 percent in the current year.
Companies want Planning security
The President of the German Institute for Economic Research, Marcel Fratzscher, also believes that increased investment in future technologies is urgently needed. In an interview with tagesschau24 He therefore advocated taking on more debt in the short and medium term: “You now have to have a clear plan as to where you want to set priorities and how you want to finance them.” The economy now also needs planning security.
This need for planning security was also evident in Habeck’s discussions with business representatives: Yesterday, Habeck met at short notice with the industry alliance of business associations and unions. Another meeting with representatives of medium-sized businesses took place on Friday morning. It became clear that there was great concern and uncertainty among companies and employees.