Chipmakers and manufacturers that were looking forward to opening up shop in Germany may need to manage their expectations, given that the country’s government put a crimp in the use of its Climate and Transformation Fund. As its own highest court in the land puts it. the use of the fund was “unconstitutional”.
Here’s the general gist of the situation: After much deliberation by its courts, the German government deemed that repurposing the unallocated 60 billion Euro (~RM307 billion), accumulated and unlocked during the COVID-19 pandemic, violated a constitutional provision that capped its borrowing capacity.
The 60 billion Euro funding was undoubtedly a major lifeline for many major players in the chipmaking industry. That exclusive list counts Intel and TSMC among others, the latter having jumped on the bandwagon earlier this year.
At this time, the current government has only two options: seek out alternative means in order to make up for the now frozen funds, or start making budget cuts to make up for it upcoming 2024 draft budget. That being said, the German government says that this won’t affect the current state of its draft budget.
“According to our current assessment, the deliberations on the 2024 draft budget are not affected by the ruling,” Christian Lindner, German Finance Minister, said after the decision. “The German Bundestag’s budget deliberations can therefore continue as planned.”
