German citizens face a severe spike in their electricity bills this winter after a ruling by the country’s Federal Constitutional Court.
Chancellor Olaf Scholz’s traffic-light Government had previously been using an apparent loophole within German law to use COVID recovery funds to fuel the country’s “green” agenda.
According to the court, such a loophole does not exist and the actions of the German Government up until now have been illegal.
Speaking in the wake of the ruling, senior Green Minister Robert Habeck warned that the ruling could see the price of energy surge in Germany as the Government had also been using the COVID funds to subsidise the cost of electricity for private households.
As a result, the €200 billion the country had set aside using the COVID loophole as an energy price buffer now no longer exists. That means if there is another price rise this winter, it will be passed directly on to the consumer.
‘The judgment, because it is so fundamental, actually refers to all funds that have been set up,” Habeck told the Deutschlandfunk broadcaster.
“If we get into a crisis, we will no longer be able to apply the brakes on gas and electricity prices. Then we will have higher gas and electricity prices.”
Germany’s top court has blown a major hole in the federal government’s budget plans by ruling that the transfer of billions of euros in pandemic-related debt to a separate climate fund was illegal. https://t.co/oBhguJ1Ol1
— Brussels Signal (@brusselssignal) November 15, 2023
Rather than taking responsibility for the illegal actions of his Government, Habeck lashed out at the opposition Christian Democratic Union (CDU) party for having taken the Government to court over its actions.
He even encouraged those upset by the news to send all letters of complaint to the CDU and not to anyone in the Government.
Members of the centre-right party have not taken kindly to the suggestion, saying that the blame for the current crisis lies exclusively with the ruling coalition.
“The coalition deliberately broke the law and thereby plunged us into budget chaos,” Christian Haase, the party’s federal budget spokesman, told one outlet.
Jens Spahn, Angela Merkel’s former health minister, echoed the claim.
“It was only the failure of the traffic lights [coalition] that led Germany to this situation,” the MP said. “This Government doesn’t have its finances under control; it has been throwing money around for two years like there is no tomorrow.”
Since the court ruling, commentators have speculated that the huge hole in the German Government’s finances could end up being what brings down the coalition.
They point out the libertarian Free Democratic Party demands what little remains is focused on repairing the economy while the Greens continue to insist cash be directed at fighting climate change.
Much of the country’s media has denounced such a possibility, with a new set of elections highly likely to see a surge in the Conservative and populist Right in the country.
Populist group Alternative für Deutschland looks set to gain the most from any political collapse. The party could double its seat share and become the second-largest group in the German Parliament.
Households in Belgium and Germany pay twice as much for electricity as Poland, a German government research body says. https://t.co/CgzHAe6ZyW
— Brussels Signal (@brusselssignal) November 16, 2023