On November 15, 2023, Chancellor Olaf Scholz, Finance Minister Christian Lindner, and Economy and Climate Minister Robert Habeck appeared at a hearing at Germany’s lower house of parliament Bundestag in Berlin. The government has stopped spending from the economic stabilisation fund for the year after a constitutional court ruling last week, according to a source close to the finance ministry.

The ruling prohibited the transfer of 60 billion euros in unused funds from the pandemic to green projects. This has forced the government to urgently work on a response to the court ruling. Werner Gatzer, state secretary at the finance ministry, stated in a letter on Tuesday that credit authorisations for the economic stabilisation fund can no longer be used in 2023 under the current legal situation. All spending that has not been used in 2023 is now blocked and requires the consent of the finance ministry.

The budget committee had previously been able to give approval for such spending. However, payments related to energy price brake are not affected by this ruling. The economic stabilisation fund was created in 2020 to support companies during the pandemic but has since shifted its focus towards addressing the energy crisis. Handelsblatt business daily was first to report on this decision to block spending from ESF on this year’s budget.

The government is working hard to address implications of this court ruling and blocked spending from economic stabilisation fund for this year. According to our source close to finance ministry all payments related to energy price brake are still unaffected by this ruling as it only blocks remaining unused funds from being transferred for green projects under current legal situation.