The three coalition parties of the German government have agreed that the country should withdraw from the Energy Charter Treaty.

"We are consistently aligning our trade policy with climate protection and are withdrawing accordingly from the Energy Charter Treaty,"  Franziska Brantner, a parliamentary state secretary in the economy and climate ministry, said in a press release.

The agreement, drafted in the 1990s, allows international investors in energy projects to sue governments for lost profits due to policy changes. It is now seen as a serious threat to national plans to fight climate change by closing coal-fired power plants or limiting oil and gas production.

This decision follows statements by France, Spain, the Netherlands, Slovenia and Poland to withdraw from the pact.

This is a serious blow to the agreement, as well as to the European Commission, which has urged countries to support reforms to the treaty.