German court refuses to block EU stimulus fund

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FRANKFURT, Germany (AP) – Germany’s highest court has refused to issue an injunction blocking the country’s participation in the European Union’s coronavirus recovery fund of 750 billion euros (over 900 billion dollars), paving the way for the launch of the fund and its joint action. loans to support green and digital economic development.

The Federal Constitutional Court said on Wednesday it had rejected a preliminary injunction request from a group including economics professor Bernd Lucke, founder of the Populist Alternative for Germany who has since left the party.

The group argued that the European Union treaty prohibits common borrowing supported by member country taxpayers to support the stimulus fund and its spending on projects to help get the economy back on its feet after the recession. pandemic.

Germany‘s participation was approved by a large majority in parliament on March 25. The Lucke group immediately filed a complaint, asking the court to suspend Germany’s participation in the fund until the case can be decided on the merits. The court’s rejection of this request on Wednesday paves the way for President Frank-Walter Steinmeier to sign legislation governing Germany’s participation in the law.

The fund’s economic recovery aims to strengthen monetary support from the European Central Bank in the form of bond purchases and the lowest benchmark interest rates.

The court said that a “summary review” did not highlight a “high probability” that the plan would violate provisions protecting the German parliament’s budget responsibility, but did not indicate when it would decide on the plan. merits of the complaint – whether such a debt is permitted.

Analysts downplayed its chances of success, but said any delay could hurt the recovery.

Isabel Schnabel, a senior official at the European Central Bank, said in an interview with Der Spiegel published on April 9 that an indefinite delay in funding “would be an economic disaster for Europe”.

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