Ministry of Economic Affairs fears growth losses due to ruling by the Federal Constitutional Court
The Federal Constitutional Court's ruling on the climate fund threatens to slow down growth in Germany, according to initial estimates by the Ministry of Economic Affairs. "According to initial rough estimates, the loss of investment funds could reduce growth by around half a percentage point in 2024," the Reuters news agency was told by a person familiar with the ministry's assumptions.
Even before the court ruling, the EU Commission had already put Germany at the bottom of the growth league in the eurozone next year with an expected increase of 0.8 percent. The German government's previous economic forecast for 2024 predicts an increase in gross domestic product (GDP) of 1.3 percent, following a contraction of 0.4 percent in the current year.
Economics Minister Robert Habeck met with the industry alliance of business associations and trade unions at short notice on Thursday, it was reported. On Friday morning, a further meeting was held with representatives of small and medium-sized enterprises. It had become clear that there was great concern and uncertainty among companies and employees.
Habeck emphasized that the financing of the Climate and Transformation Fund (KTF) was primarily not just a climate policy issue, but above all a location issue. He would continue to campaign for funding with the utmost vigor. "The ruling of the Federal Constitutional Court is fundamental and the Federal Government is carefully examining the implications. Of course we will respect it," said Habeck. "As a coalition, we will tackle the problem together and work out solutions together."
Habeck warned against losing sight of the international situation in the German debate. The transformation of the industry is taking place globally because many countries and companies have recognized that these are the markets of the future. "Global competition is being fought over climate technologies. So the question is not whether green steel will be produced, but whether it will also be produced in Germany," he added, referring to the USA, for example, which is supporting the domestic economy with its Inflation Reduction Act (IRA) program.
The Federal Constitutional Court had declared the climate fund set up by the traffic light government to be unlawful and also declared a supplementary budget by the traffic light government to be null and void. There is now an initial shortfall of 60 billion euros from the KTF climate fund to finance measures to combat climate change and promote industry, for example. The coalition government of SPD, Greens and FDP wants to clarify how this can be achieved in parallel with the ongoing 2024 budget negotiations.
The Ministry of Economic Affairs is actively seeking alternatives to mitigate the potential growth losses from the Federal Constitutional Court's verdict on the climate fund. The verdict, which declared the climate fund and a supplementary budget by the traffic light government as unlawful, has raised concerns within the EU Commission and the industry, potentially impacting Germany's growth units.
Source: www.ntv.de
