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German court decision could hold up EU’s Covid-19 recovery funds

Image: DesignRage, via Shutterstock

Commission ‘confident’ German judges will ‘swiftly’ consider complaint and allow fund to open on time

The rollout of the EU’s €750 billion Covid-19 recovery fund for activities including R&D has been put on hold across the bloc by a legal complaint, filed with Germany’s highest court, against the debt plan underpinning the fund.

Germany’s constitutional court said on 26 March that it would consider the complaint against Next Generation EU, and thereby paused German ratification of the 2020 EU law creating the fund. Money cannot flow from the fund to national governments until all member states have ratified the law on the use of the EU’s ‘own resources’ for the fund.

Governments are already proposing projects and reforms to the European Commission for their share of the fund, which Commission president Ursula von der Leyen has said should begin paying out by mid-2021.

The complaint was filed by a rule-of-law campaign group, Bündnis Bürgerwille, on behalf of about 2,000 German citizens, including at least 40 named academics.

Although he did not question the need for the fund, the head of the campaign group, Ravel Meeth, said the borrowing structure behind it was not in Germany’s interest and was a “blatant breach of contract”.

A Commission spokesperson said it was “aware” of the court’s decision but also “convinced of the legality” of the EU law creating the fund.

The spokesperson said 16 EU countries had already ratified the law and that it was “crucial” the law be “rapidly approved” by all, “in particular in the light of the challenges due to the Covid-19 pandemic”.

“We note that the validity of the ‘own resources’ decision has not been put in question by the national court. The Commission is confident that the German Constitutional Court will decide swiftly,” the spokesperson said.

“The EU objective remains to ensure the completion of the ratification process in all member states by the end of the second quarter of this year.”

Among the governments that have set out their plans for the fund, the Greek government told Research Professional News it wants to spend €726m of its share on R&D.