Germany to discontinue economic stabilisation fund by year end - source

The German government is planning on discontinuing the country's economic stabilisation fund by year end in response to a negative constitutional ruling on its budget manoeuvres last week, a government source said on Tuesday. A suspension would give a better legal base to the expenditure this year from the economic stabilisation fund, rather than allow for new spending.

The German government is planning on discontinuing the country's economic stabilisation fund by year end in response to a negative constitutional ruling on its budget manoeuvres last week, a government source said on Tuesday. Chancellor Olaf Scholz's government is scrambling to work out the implications of the court ruling which barred the government from transferring 60 billion euros ($65.44 billion) in unused funds from the pandemic to green projects.

The source said the government was considering suspending Germany's debt brake this year again, noting its justification for this would have to follow the guidelines laid out in the court ruling. A suspension would give a better legal base to the expenditure this year from the economic stabilisation fund, rather than allow for new spending.