: Germany’s top judges to rule on legality of government budget. Here’s what it’s all about.

by | Nov 14, 2023 | Stock Market

Germany’s Federal Constitutional Court is expected on Wednesday to deliver a decision on fiscal rules that could have big implications for the government budget in Europe’s biggest economy. The landmark ruling relates to Germany’s 2021 second supplementary budget, the spending of funds initially earmarked for COVID-related spending and the use of special purpose vehicles.

It’s a €400 billion court decision, according to Christian Schulz, deputy chief European economist at Citi. That’s a lot. So, utilizing his handy note on the issue, here’s an explainer. What’s happening, where and when. The Federal Constitutional Court, or Bundesverfassungsgericht, is the supreme constitutional court for the Federal Republic of Germany, based in the southwestern city of Karlsruhe. On Wednesday November 15 at 10 a.m. central European time, 4 a.m. Eastern, it’s red-robed judges should reveal their ruling on whether the German government’s budget in 2021 was legal or not. So, what’s the big deal with that 2021 budget. A week after current German Chancellor Olaf Scholz took power on December 8th 2021, his government passed a Second Supplementary Budget. The traffic light coalition, as the new government was known, comprised the Social Democrats, Free Democrats and a Green bloc, inherited a nation ravaged by the COVID pandemic and immediately w …

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