German court nixes Merkel’s tax on nuclear power

German chancellor Angela Merkel faced major embarrassment yesterday after the country's top court threw out a 2011 levy on nuclear operators, in a reverse that her opponents will likely use against her in an election year.

According to commentators, the ruling exposed a policy blunder by Merkel's previous government, raised questions about the impact on Germany's balanced budget and refocused attention on the chancellor's abrupt shift to renewables after the Fukushima nuclear disaster. According to critics, Merkel exploited the accident to scrap her unpopular atomic power policy.

Germany's Social Democrats sought to capitalise on the reverse as the latest poll showed them trailing Merkel's party bloc by 15 percentage points, ahead of a national election on 24 September.

It's ''a resounding slap in the face'' for Merkel's second-term coalition with the Free Democrats, environment minister Barbara Hendricks, a Social Democrat, said in a statement. ''The fact that this bungle still pays off for the nuclear operators years later makes the verdict of the Federal Constitutional Court a colossal irritation.''

As the court ordered that the government reimburse utilities, Merkel and finance minister Wolfgang Schaeuble were left to make provisions for €6.3 billion ($7.1 billion) plus interest in an election-year budget they promised to balance for the fourth time in a row.

According to commentators, the verdict marked a second win for utilities over Germany's nuclear policy following a court ruling in December that a push to shut down all of Germany's nuclear plants violated their rights. E.ON, RWE and EnBW had taken hard hits over chancellor Angela Merkel's decision to exit nuclear power by 2022.

The nuclear fuel tax, imposed between 2011 and 2016 had further burdened utilities and had amounted to payments of €6.285 billion from nuclear plant operators.

According to the Karlsruhe-based Constitutional Court, the tax was "formally unconstitutional and void". It added that the government had no legal competence to claim it.