German vice chancellor cancels COP28 visit due to budget crisis

German Vice Chancellor Robert Habeck has cancelled a trip to the UN Climate Change Conference in Dubai planned for Monday evening due to the budget crisis at home.

The move follows a landmark court decision earlier this month that blew a huge hole in the government's spending plans.

Habeck's presence in Berlin is necessary in order to make further progress in the talks on the 2024 budget, a spokeswoman for the Economy Ministry announced on Sunday evening.

The cancellation was done in consultation with and at the request of Chancellor Olaf Scholz, she added.

Habeck, who is also economy and climate minister, was due to participate in the COP28 climate conference in Dubai on Tuesday.

A recent decision by Germany's Constitutional Court struck down plans to reallocate €60 billion ($65 billion) borrowed during the coronavirus pandemic for climate projects instead.

The fallout from the decision, which almost certainly impacts other special funds as well, has created a major budget crisis for Scholz's three-party coalition government.

Negotiations on the budget are currently taking place primarily in a three-way round with Scholz, Habeck and Finance Minister Christian Lindner.

The coalition must reach an agreement within the next few days if it wants to adopt the budget for 2024 before the end of the year.

A political agreement in principle must be reached by the Cabinet meeting on Wednesday so that there is still enough time for the parliamentary process.

Habeck told Germany's ARD television station on Sunday evening he sees progress in the negotiations.

"I am very optimistic that we are well on the way to reaching an agreement," he said.

When asked if this meant that he wasn't sure that the coalition would reach an agreement, Habeck said: "I can't speak for everyone. But I repeat that I believe we are making good progress."

"It is a process that is arduous, one can see that, but it is making progress," Habeck added.