BERLIN, Nov 17 Reuters A German court ruling that wiped billions from the federal budget could drag down growth by as much as half a percentage point next year in Europe39;s biggest economy, an economy ministry source told Reuters on Friday.

The coalition is scrambling to fix a large hole in its finances after a court ruling blocked the government from transferring 60 billion euros 65 billion in unused funds from the pandemic towards green initiatives and industry support.

The assessment of the ruling is an early indication of just how damaging some in Chancellor Olaf Scholz39;s coalition see it, though Finance Minister Christian Lindner on Thursday had said it was too early to assess the extent of the issue.

The economy and finance ministry declined immediate comment.

According to initial rough estimates, a loss of investment funds could cause growth in 2024 to be about half a percentage point lower, the source, who is familiar with the economy ministry39;s forecasts, said.

So the ruling could have a negative impact on economic growth, the source added.

Last month, the economy ministry predicted 1.3 growth for next year.

The court ruling has increased tensions in Chancellor Olaf Scholz39;s already fractious government, which has seen support slump as it tackles a series of crises and the economy teeters on the brink of recession.

Although the Greens want additional spending, the Free Democrats FDP, which heads the finance ministry, reject additional debt and…