German finance ministry imposes temporary freeze on future spending pledges -letter

The aim of the measure, which applied to all ministries, the chancellery, and a 200-billion-euro fund to support companies through the pandemic and energy crisis, was to "avoid further prior burdens for future financial years," Gatzer said in the letter. A source at the finance ministry confirmed the move.

The German finance ministry temporarily froze future spending pledges across almost the entire federal budget, a letter seen by Reuters showed, as it seeks a solution to a 60-billion-euro ($65.4 billion) hole in its spending plans.

The move by budget secretary Werner Gatzer blocks the ability to spend unallocated funds unless there is a "material and temporarily unavoidable need that is set out in writing," the letter, sent to federal ministries and seen by Reuters, said. The aim of the measure, which applied to all ministries, the chancellery, and a 200-billion-euro fund to support companies through the pandemic and energy crisis, was to "avoid further prior burdens for future financial years," Gatzer said in the letter.

A source at the finance ministry confirmed the move. "Existing obligations will continue to be met but no new ones will be made," the source said, declining to be named. The finance ministry was not immediately available for comment.

A German constitutional court last week ruled that the government's move to transfer 60 billion euros of unused pandemic funds towards climate funds and industry support was illegal, sending the government scrambling for alternative sources of funding. ($1 = 0.9168 euros)

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