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German court halts ratification of EU virus recovery fund

·2-min read
German President Frank-Walter Steinmeier was due to sign off on the 750-billion-euro coronavirus recovery fund when the constitutional court halted the ratification.

The German Constitutional Court on Friday abruptly stopped Europe's biggest economy from ratifying a 750-billion-euro ($885 billion) EU coronavirus recovery fund, after a last-minute legal challenge was filed against the move.

Following approval by both the upper and lower house of parliament, President Frank-Walter Steinmeier was due to sign off on the fund to complete Germany's formal ratification process.

But five individuals filed a challenge, prompting the court to decide that the ratification "shall not be executed pending the decision of the Federal Constitutional Court on the temporary injunction application".

The court gave only the first alphabet of each of the challengers' names. The far-right AfD party had vowed to fight passage of the EU fund.

Lawmakers' approval of the huge fund marked a breach in a German taboo against pooled debt.

German leaders have argued that it was necessary to get the bloc back on the road to growth after a pandemic that has ravaged the economy.

"The vote is a clear signal for European solidarity and strength," said Finance Minister Olaf Scholz, stressing 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," he said.

Along with French President Emmanuel Macron, Chancellor Angela Merkel had sketched out the fund last year, which eventually was agreed by the EU's 27 members in December as part of a 1.8-trillion-euro budget up to 2027.

The move to offer loans and outright grants to EU countries hit hardest by the pandemic, such as Italy, smashed long-held stereotypes of Germany as a "frugal" country staunchly opposed to taking responsibility for others' debt.

But faced with a pandemic which spared no one, Europe's biggest economy crossed several red lines to pull itself out of a crippling recession.

It also suspended a constitutional rule that blocks the government from incurring new debt for 2020 and 2021.

Berlin, which intends to borrow a record 240.2 billion euros in 2021, is now seeking a halt to the no-new-borrowings rule for a third consecutive year in 2022.