Germany's budget is in trouble, and solutions to the government policy funding crisis are few and far between. Here's how it came to this and what it means.

Germany’s budget is in trouble.

Last week, the constitutional court ruled that it was unlawful to re-allocate unused debt originally designated for emergency Covid-19 pandemic funding to current spending plans.

This week, the finance ministry froze spending across all ministries.

But that could be just the tip of the iceberg as financial woes could lead to political ones, and even potentially endanger the future of Berlin’s coalition government.

Germany didn’t get to this point overnight, however — in ways, the roots of the current crisis even predate the pandemic. And that is because of Germany’s so-called debt brake.

  • maynarkh@feddit.nlEnglish
    31·
    7 months ago

    TL;DR

    Germany is not “running out of money”, this is a political crisis, not a financial one.

    The government took on additional debt for COVID which it didn’t need after all as it came out better than expected. They spent it on fighting climate change instead. The opposition successfully argued in court that the govt wasn’t allowed to do that and they need to put the money back, but they already spent it.