Germany Faces Economic Contraction and Budget Crisis Amid High Inflation and Court Ruling
• Germany's economy shrank 0.1% in Q3 as inflation eroded consumer spending; it's the only major economy expected to contract this year • A court ruling blew a 60 billion euro hole in next year's budget, threatening spending on climate change and energy relief • The ruling said the government violated debt rules by repurposing unused COVID funds for other programs • Chancellor Scholz promised quick action to resolve the crisis, but cuts may be needed to key climate and industry programs • Business confidence remains low according to the Ifo index, pointing to an extended period of stagnation and possible recession