Germany's highest court annuls a decision to repurpose COVID relief funding for climate measures

abcnews.go.com:

Germany’s highest court has annulled a government decision to repurpose 60 billion euros ($65 billion) originally meant to cushion the fallout from the coronavirus pandemic for measures to help combat climate change and modernize the country

BERLIN — Germany's highest court on Wednesday annulled a government decision to repurpose 60 billion euros ($65 billion) originally meant to cushion the fallout from the coronavirus pandemic for measures to help combat climate change and modernize the country. The ruling created a significant new problem for Chancellor Olaf Scholz's quarrelsome coalition.

The money at stake was added retrospectively to the 2021 budget in light of the COVID-19 pandemic, under rules that allow new borrowing in emergencies despite Germany's strict restrictions on running up debt.

But it eventually wasn't needed for that purpose, and the center-left Scholz's three-party coalition decided in 2022 to put the money into the “climate and transformation fund,” arguing that investment in measures to protect the climate would help the economy recover from the pandemic.

Lawmakers with the main conservative opposition bloc contended that it was a trick to get around Germany's so-called “debt brake," and 197 of them complained to the Federal Constitutional Court.

The court ruled that the government's move was unconstitutional and said it will have to find other ways of filling the resulting hole in the climate fund.

The debt brake, introduced more than a decade ago, allows new borrowing to the tune of only 0.35% of annual gross domestic product.

It can be suspended to deal with natural disasters or other emergencies that are out of the state’s control, and was for the three years after the coronavirus pandemic