Just before Christmas, another strong fiscal shock comes to stir the already stormy waters of the coalition of Social Democrats, Greens, Liberals. With a surprising at first, but according to analysts rather expected decision that seemed to be a one-way street, the German sub. Finance extends the freezing of budget expenditures for all federal ministries.

And this after the freezing of 60 billion euros, which were intended to deal with the pandemic and can no longer be transferred to the Climate Protection Fund under formation, one of the declared goals of the joint government, from which large public projects would be financed and investments.

According to the recent landmark decision of the Federal Constitutional Court of Karlsruhe, the absorption by the Climate Fund of the 60 billion intended for the pandemic is unconstitutional.

Stop spending of all ministries

As reported by German media, citing Finance Ministry circles, all spending approvals for all individual federal ministries are immediately suspended in order to avoid new burdens in the coming years, with only a few and strictly defined exceptions.

For this move, the government representative Stephen Hempstrait had recently suggested, noting that “after the decision of the Constitutional Court “the conditions are different”. According to circles of the German Ministry of Finance, it is not a decision taken by Liberal Minister Christian Lindner alone, but “following an agreement”, which seems “logical”.

At the same time, however, the three-party coalition government, no matter how much it tries to appear united, has suffered another strong blow from the Karlsruhe decision, with the Social Democrats calling for the suspension of the constitutional rule of the “debt brake”, which prevents the assumption of new debts and is a primary objective of Cr. Lindner.

For his part, the Green Minister for Economy and Energy Robert Hambeck, responsible and advocate of the Climate Fund, although on principle he is opposed to the reinstatement of the debt brake rule does not seem to realistically see another option.

What is certain is that both the Karlsruhe court decision and the political decision to freeze spending deal another hard blow to the balance within the governing coalition that no longer has many ways to complete the goal of a climate-neutral transformation of the economy within its term. .