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BERLIN — German Finance Minister Christian Lindner announced Thursday that he will propose a draft supplementary budget for 2023, signaling that the government will seek to suspend the debt brake in the aftermath of a constitutional court ruling that has plunged the country into a severe budgetary crisis.
“There is now new legal clarity on how we have to deal with special assets and emergency loans,” Lindner said in a short statement to reporters. “We will now put expenditure, particularly for the electricity and gas price brakes, on a constitutionally secure footing.”
Germany’s constitutional court ruled last week that a government plan to repurpose €60 billion left over from an emergency COVID-19 fund to finance the country’s green agenda was unconstitutional. But the ruling also had far wider implications that limit the government’s ability to draw from a variety of special funds that have been created to circumvent the country’s constitutionally enshrined debt brake, which restricts the federal deficit to 0.35 percent of GDP, except in times of emergency.
The ruling has forced the government to retroactively include more than €30 billion of spending for an energy price brake — which had initially been financed through a special fund outside the regular budget — as part of its regular spending. This means the ruling has all but forced the German finance ministry to declare an emergency for 2023 and suspend the debt brake.
Linder said he would present a supplementary budget for 2023 at a cabinet meeting on Wednesday.
