Brussels (Brussels Morning) The German Federal Constitutional Court has rejected a constitutional challenge against Germany’s participation in the EU’s 750-billion euro coronavirus recovery fund, although it has yet to finalise the decision, Deutsche Welle reports.
The challenge was lodged by the far-right Alternative for Germany (AfD) party and a group called the Citizens’ Will Alliance, claiming that the Union’s plan for a debt-fueled recovery fund, which would raise the upper limit for national contributions to the EU budget, infringed on the German constitution.
The plan had already been passed by both houses of the German parliament, and President Frank-Walter Steinmeier was set to sign it into force when the process was halted on 26 March by the Constitutional Court, after an emergency appeal against ratification was filed by the AfD and the citizens’ group.
On Wednesday, the Federal Constitutional Court issued a temporary judgement allowing the ratification of the legislation necessary for the fund to proceed. The court noted that a “summary examination” of the relevant bill had not found a high likelihood that it would infringe on the constitution, and therefore rejected the provisional injunction.
Raising the limit
“The drawbacks resulting from not approving the provisional measure and the law later turning out to be unconstitutional are smaller than the consequences of approving the measures and the constitutional challenge later turning out to be unfounded,” the court concluded.
The changes pending Steinmeier’s signature include raising the upper limit for contribution to the EU budget by 0.6 percentage points, to a maximum of 2% of gross national income, which would remain in effect until at least 2058. The limit is raised as insurance for repayment of recovery borrowing should there be insufficient tax income to cover the planned spending.
Recovery package plans include issuing EU bonds on the market as a joint debt of the bloc. However, the process can only start after all 27 member states have ratified the measure.