A Cloud of Uncertainty: Europe’s Covid Recovery Package and the German Constitutional Court

In what was described by some observers as Europe’s “Hamiltonian moment,” last July the European Union’s 27 member states agreed to raise 750 billion euros through the European Commission to address the economic crisis which was sparked by the coronavirus. The debt-financed stimulus package has to be ratified by each national parliament – and 478 out of 645 German lawmakers supported the bill. But, in late March the EU’s Recover Fund hit a roadblock after the German constitutional court raised questions about how new debt is being taken on. The court determined that the Federal President may not sign off on legislation ratifying the European recovery package. It could take up to three months for the court to decide on this matter.

On April 30, the ACG hosted a discussion with economic policy experts Prof. Dr. Michael Hüther, the Director and Member of the Executive Committee of the German Economic Institute, and Prof. Dr. Monika Schnitzer, Professor of Economics and Chair of Comparative Economics at the Ludwig-Maximilians-University in Munich.