Auditors and opposition criticise German govt’s debt-financed boost to climate fund

Germany’s new government cabinet has passed a supplementary budget to boost the country’s climate and transformation fund with debt-financed 60 billion euros. “Sixty billion euros for investments in the future are a booster for the national economy,” said finance minister Christian Lindner. The funds would help the green recovery after the coronavirus pandemic and enable “a powerful departure into a climate-neutral and digital future for Germany”, he added. The government coalition uses an emergency clause in the constitution which suspends debt limits from 2020 to 2022, during the coronavirus crisis. Because the economy has recovered faster than expected, the 240 billion euros that Germany aimed to borrow this year are not needed in full. Instead of waiving part of the new loans, the government is now rededicating them and shifting 60 billion euros into the Climate and Transformation Fund (formerly Energy and Climate Fund) – to be used over the coming years.

Kay Scheller, the president of Germany’s Federal Court of Auditors (Bundesrechnungshof), has criticised the budget manoeuvre, reports Frankfurter Allgemeine Zeitung. This year’s 240 billion euros had been earmarked for the fight against the pandemic. Now they are to be used for climate investments, and only in the coming years. “There is no connection to the emergency situation,” Scheller told the newspaper. For the same reason, opinion pieces in Rheinische Post and Tagesspiegel argue that the coalition’s budget plans might be unconstitutional, or could come under scrutiny by the constitutional court. Tageszeitung (taz) reports that finance minister Lindner had criticised the same manoeuvre when the former government under chancellor Angela Merkel had employed it for 2020.

How to finance climate action is a key issue for the new government coalition of the SPD, the Green Party and the pro-business FDP. Finance minister Lindner is an outspoken sceptic of state intervention and debt-financed investments. And his party has always stood for a laissez-faire approach to market forces. This is a marked contrast to its coalition partners SPD and Greens, who have run on a platform of large public investments and better regulation of companies to ensure they abide by emissions reduction targets.