German court quashes challenge to EU virus recovery fund

BERLIN: The German Constitutional Court on Wednesday threw out a legal challenge that had stopped Europe's biggest economy from ratifying a 750-billion-euro ($885 billion) EU coronavirus recovery fund.

The decision essentially clears the path for Germany to sign off on the fund.

German President Frank-Walter Steinmeier had been due to complete Germany's formal ratification process after both the upper and lower house of parliament approved it late March.

But five individuals had filed a challenge, prompting the court to stop Steinmeier putting pen to the deal, pending its examination of the complaint.

The court rejected the emergency bid to halt the ratification process, saying in a statement that "a summary examination did not find a high probability of a violation of... the Basic Law".

The court said that it would keep examining the main arguments in the challenge.

However, given the very low probability of the case being successful, the potential harm done in holding up ratification would be far more significant than to allow it to go ahead, it said.

Welcoming the decision, European Union chief Ursula von der Leyen said: "The EU stays on track with its economic recovery, following this unprecedented pandemic. #NextGenerationEU will pave the way for a green, digital and more resilient European Union."

Along with French President Emmanuel Macron, Chancellor Angela Merkel had sketched out the fund last year, which eventually was agreed by the EU's 27 members in December as part of a 1.8-trillion-euro budget up to 2027.

The move to offer loans and outright grants to EU countries hit hardest by the pandemic, such as Italy, smashed long-held stereotypes of Germany as a "frugal" country staunchly opposed to taking responsibility for others' debt.

With only 17 out of 27 countries having ratified, impatience had been rising from countries that sorely need aid.

Voicing his frustration early April, French Economy Minister Bruno Le Maire said he had "promised the French people that the European money would arrive at the start of the summer, at the start of July.

"I would like to be able to keep that promise and I would like Europe to understand that we shouldn't have to wait before being able to spend that money," he said.

Countries across Europe are still struggling to put down a vicious third wave of the coronavirus pandemic.

With many sectors including tourism still unable to resume operation in many countries, the EU sees growth for the eurozone reaching 3.8 percent this year, down from the earlier forecasted 4.2 percent.

Economic heavyweight Germany itself is still ailing from infections fuelled mainly by the more contagious British coronavirus strain, with health authorities urging tougher restrictions to prevent hospitals from being overwhelmed.

Berlin has already crossed several red lines to pull itself out of a crippling recession.

It also suspended a constitutional rule that blocks the government from incurring new debt for 2020 and 2021.