Europe’s largest economy is seeing some political chaos.
The demise began on November 15, 2023, when the Federal Constitutional Court declared parts of the government’s budget policy unconstitutional. It deprived the coalition of a viable financial plan, then exposed the rifts between its partners.
Germany’s highest court ruled against the government’s plans to reallocate money earmarked but never spent from a cache of debt taken out to mitigate the fallout of the COVID-19 pandemic. The money was instead earmarked for the government’s climate action budget. The court ruling left the budget €60 billion ($65 billion) short…
The plans were grand: Germany was to become a pioneer in climate protection and 400,000 new homes were to be built each year. The welfare state was to be modernized, support for the unemployed was to be reformed into citizen’s income and basic child protection and old-age pensions were supposed to be financed in part through investments in the stock market to stabilize the pension level, the minimum wage was to be increased, as was spending on research and development…
The first deep rift in the coalition came when Finance Minister Lindner came forward in the media with the idea of granting drivers a discount on petrol and diesel to offset skyrocketing prices. The Green Party was caught off guard, reacted with anger to these proposals and made this clear in public. From then on, the tone changed and became increasingly harsh…
DB2