Germany

Transferring back money from Germany's Climate Transformation fund after a top court ruling causes a chain reaction, as the now-cancelled 60-billion-euro in funds leverage far more capital, Economy Minister Robert Habeck said on Tuesday, Reuters reported. "These funds are not an add-on that one can carelessly do without ... the loss to the economy if investments were not made now would be even greater," Habeck told a news conference in the city of Jena. The government was now preparing and discussing at high speed how to set up its budget in light of the ruling and the missing funds.

The German government pledged Monday to invest 4 billion euros ($4.37 billion) in African green energy projects until 2030, with Chancellor Olaf Scholz saying that countries in Africa should benefit more from their wealth of raw materials, the Associated Press reported. Scholz discussed the pledge at a news conference on the G20 Compact with Africa summit taking place in Berlin. He did not mention any specific projects but said the materials used in green energy should be processed in the African nations they come from. “This creates jobs and prosperity in these countries,” Scholz said.

German Economy Minister Robert Habeck on Monday criticised sticking to what he called the country's "inflexible" debt brake and took a swipe at Finance Minister Christian Lindner on prospective subsidy cuts, saying it was "all just talk," Reuters reported. The comments laid bare strains in Chancellor Olaf Scholz's ruling coalition after a court ruling last week that wiped 60 billion euros ($65 billion) from the federal budget sent the government scrambling for alternative sources of funding.

Germany’s top court struck down a key element of the government’s plans to address climate change and transform the economy, dealing Chancellor Olaf Scholz’s coalition a major setback that throws its budget policy into disarray, Bloomberg News reported. The Federal Constitutional Court ruled that the shifting of €60 billion ($65.2 billion) earmarked to tackle the Covid-19 pandemic into an off-budget fund violated German constitutional law.

Germany’s highest court ruled on Wednesday that the government’s plan to repurpose tens of billions of euros from a pandemic fund to help finance environmental projects violated the nation’s Constitution, the New York Times reported. The decision threatens to rip a hole in the country’s budget and complicate its transition to a greener economy.

Germany is seeing a growing number of businesses and individuals apply for insolvency as well as declaring bankruptcy according to its Federal Statistics Office (Destatis), which published preliminary details from an annual report on Tuesday, DW.com reported. According to the office's data, insolvency applications rose 22.4% in October 2023 as compared to October 2022. That number had been 19.5% in September. Statisticians said they have consistently registered double-digit increases since June.

Germany's economy will shrink by 0.4% this year and grow only by a relatively modest 0.7% next year, the government's panel of independent economic advisers forecast Wednesday, the Associated Press reported. The panel joined several other forecasters in revising downward its outlook for Europe's biggest economy. Its prediction for this year was in line with one issued by the government about a month ago, but next year's forecast was considerably gloomier than the 1.3% the government expects.

German inflation slowed markedly — and more than expected — in October as Europe’s biggest economy struggles to grow, Bloomberg News reported. At 3%, price pressures are the weakest since June 2021, the statistics office said Monday. Economists had predicted a moderation to 3.3%. The result underpins the European Central Bank’s argument that a record bout of interest-rate increases is starting to show its effects. A sharp retreat is also expected in Italy and, to a lesser extent, in France and in the 20-nation euro zone, with data due Tuesday.

Germany’s business outlook improved slightly, supporting expectations for Europe’s largest economy to rebound modestly — even as it faces a possible second recession in just over a year, Bloomberg News reported. An expectations index by the Ifo institute rose to 84.7 in October, up from a revised 83.1 the previous month. That beat the median estimate in a Bloomberg survey for an increase to 83.5. A measure of current conditions unexpectedly advanced. “What we see here does suggest that we see a certain stabilization,” Ifo President Clemens Fuest told Bloomberg Television on Wednesday.