EU Recovery Fund Approval in Germany Halted

The German Bundestag. Photo source: bundestag.de

Approval of a 750-billion-euro EU Covid-19 recovery fund, part of a 1.8-trillion-euro budget up to 2027 agreed by the EU’s 27 states last year, was temporarily blocked on Friday after German lawmakers had ratified it earlier.

Hours after the lower and upper houses of parliament approved the fund, the German Constitutional Court halted the vote citing a last-minute legal challenge filed against the move.

The court said ratification “shall not be executed pending the decision of the Federal Constitutional Court on the temporary injunction application”.

German Chancellor Angela Merkel said the EU recovery plan to allow joint debt and channel funding to member states worst hit by the coronavirus pandemic will create an “indispensable” tool  to overcome the crisis, but must be a one-off event.

Had the fund be approved, it would have been a breakthrough defeating German resistance to pooled debt.

German Chancellor Angela Merkel. Photo: Bergmann/Bundesregierung

President Frank-Walter Steinmeier was to complete Germany’s formal ratification process today after signing the document.

Speaking earlier today, German Finance Minister Olaf Scholz said the vote was a “clear signal for European solidarity and strength,” adding that it was in Germany’s interest that the entire bloc emerged strong from the crisis.

“A powerful recovery in Europe is an important prerequisite for Germany’s own economic success and prosperity,” Scholz said.

In Greece meanwhile, the Greek recovery plan is set to be on next week’s ministerial meeting agenda with the complete plan to be presented to Greek Prime Minister Kyriakos Mitsotakis so that a final version can reach Brussels by April 15 placing Greece among the first – in the coming year – countries to receive aid from the fund.