Impact of the Federal Constitutional Court's budget ruling: What does this mean for the East German economy?

Impact of the Federal Constitutional Court's budget ruling: What does this mean for the East German economy?

According to a report by www.t-online.de,

The Green Party politician Michael Kellner warns of the negative effects of the budget ruling on the East German economy. This region would be particularly affected if the missing 60 billion euros for the climate and transformation fund cannot be raised elsewhere.

The impact of this ruling on the East German economy could be serious. Of the announced investments in German industry of 80 billion euros, around 50 billion were in Eastern Germany. If this amount is not available, this would lead to significant damage and job losses. In particular, the planned locations for chip factories in Dresden and Magdeburg as well as the reconstruction of the solar industry in East Germany would be at risk.

The demand from FDP finance and budget expert Frank Schäffler to waive subsidies for chip factories also affects the financial sector. If this proposal were to be implemented, it would not only affect the companies affected, but also the entire economic structure in East Germany.

The recommendation by DIW expert Claudia Kemfert to suspend the debt brake in order to implement the transformation in Germany would also have a significant impact on the financial sector. This step would mean greater government spending and, with it, a change in financial flows, which could affect the entire economic structure.