Germany’s constitutional court on Tuesday threw out a legal challenge against the European Union’s 750-billion-euro ($786 billion) recovery fund, which saw the bloc take on joint debt to help member states overcome the COVID-19 crisis.
The ruling will feed into debate on whether the EU can take on joint debt for other crises in the future, at a time when the Ukraine war and the resulting energy stand-off with Russia are forcing member states to announce costly relief programmes.
The recovery fund, dubbed Next Generation EU, allowed the European Commission to raise up to 750 billion euros on capital markets and pass on the money to member states through payments linked to jointly agreed reform and investment plans, partly as grants and partly as loans.
The funds are to be repaid from the EU budget over the coming decades, with Germany shouldering by far the biggest share of any member state.
Tuesday’s ruling rejected two constitutional complaints against legislation passed by the Bundestag parliament in March 2021 to ratify the massive funding programme.
The complaints were brought by Bernd Lucke, co-founder of the eurosceptic Alternative for Germany (AfD), who left the party after it drifted further to the right, and Heinrich Weiss, a businessman who once served as the head of Germany’s industry lobby group BDI.
The court ruled that the ratification act had not violated their right to democratic self-determination nor did it “impair the overall budgetary responsibility of the Bundestag”.