Germany's Coalition at Risk: Accounting Error Threatens Budget and Green Shift

Germany's three-way coalition government, consisting of the Social Democrats, Greens, and Free Democrats, is facing a potential collapse after the country's highest court ruled that their plan to repurpose €60 billion from a COVID-19 fund for their climate agenda was unconstitutional. The ruling has created a significant setback for the coalition's environmental strategy and could jeopardize their plans to transition the German economy away from fossil fuels. The coalition now faces the challenge of finding alternative ways to finance their climate initiatives, with analysts warning that failure to do so could lead to the collapse of the coalition itself. The disarray within the government, including previous embarrassments and infighting, has fueled speculation that Chancellor Olaf Scholz may consider forming a coalition with the center-right Christian Democrats instead. However, with less than two years until the next national election, such a scenario seems unlikely.