Further holes in the German budget after Constitutional Court verdict?

Supreme court makes €60 billion disappear. What does this mean for the WSF?

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Dr. Ralph Solveen

Commerzbank Economic Research

November 17 2023

With the Federal Constitutional Court's ruling on the 2021 supplementary budget, many investors are wondering whether other of the many special purpose funds could also be affected by this and how large the resulting gap in the federal budget will ultimately be. In our opinion, there are at least some parallels between the Economic Stabilization Fund (WSF) and the now contested transfer to the Climate and Transformation Fund, which could cause additional problems for the federal budget in the event of a further appeal to the FCC.

On Wednesday, the Federal Constitutional Court (FCC) ruled that the second supplementary budget 2021 violates the Basic Law – the German constitution – because unused credit authorizations of 60 billion euros in 2022 were transferred to the Climate and Transformation Fund (KTF). These funds may therefore not be used to finance the expenditure of the KTF.

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