BERLIN (Reuters) -A German court ruling that forced Berlin to freeze 60 billion euros ($65 billion) in planned green investment spending could have a negative impact on growth in Europe’s biggest economy, an economy ministry source told Reuters on Friday.
“According to initial rough estimates, a loss of investment funds could cause growth in 2024 to be about half a percentage point lower,” the source, who is familiar with the economy ministry’s forecasts, said.
“So the ruling could have a negative impact on economic growth,” the source added.
Last month, the economy ministry predicted 1.3% growth for next year.
It had no immediate comment on Friday.
Chancellor Olaf Scholz’s coalition is scrambling to fix a big hole in its finances after a court ruling on Wednesday blocked it from transferring 60 billion euros in unused funds from the pandemic towards green projects and industry support.
The ruling has already raised tensions within the awkward coalition.
The economy ministry is run by the Greens, who share power with Scholz’s Social Democrats (SPD) and the pro-business Free Democrats (FDP). The FDP’s Christian Lindner is in charge of the finance ministry.
The finance ministry also had no immediate comment.
($1 = 0.9213 euros)
(Reporting by Andreas RinkeWriting by Miranda Murray, Madeline ChambersEditing by Sabine Wollrab, Kirsti Knolle)
