https://www.spiked-online.com/2023/12/13/go-green-go-bankrupt/
The German government’s green agenda could be in serious trouble.
In November, Germany’s supreme court declared that it would be unlawful for the government to use emergency Covid-19 funds to pay for its transition to Net Zero. This prompted the coalition to announce last week that it may not be able to produce a 2024 budget by the end of this year. Public spending for the rest of 2023 has been frozen.
There is now a chance that the 2024 budget may indeed be ready this week. But the fiasco has nonetheless been deeply embarrassing for chancellor Olaf Scholz. The supreme court ruling has made a mockery of Scholz’s promise to spend billions on new ecological projects to support Germany’s flailing economy. Earlier this year, Scholz was claiming that Germany would experience an economic miracle fuelled by investment in new wind turbines, electricity grids, hydrogen power and subsidies for chip and battery production. That has now been exposed as just so much hot air.
This budget crisis poses huge problems for the government and its Net Zero agenda. Back in 2022, the coalition had intended to plug a €60 billion gap in the budget with funds that had been set aside to deal with the cost of the Covid pandemic and lockdowns. This €60 billion was to be repurposed to cover part of the immense costs of its green-energy transition plan. Doing so would have allowed the government to pretend that the Net Zero transition would place no additional burden on the taxpayer, and therefore dodge any parliamentary and public debate about its green policies.
It’s hardly surprising that the government’s budgetary trick has now been ruled unconstitutional. One reason the court gave is that emergency funds must be used for the purpose they were set up for. Another is that the ‘special budget’ is incompatible with Germany’s ‘debt brake rule’ (Schuldenbremse), which caps fiscal deficits at 0.35 per cent of GDP per year.