GermanyIn the Christian Union (CDU/CSU) parties and representatives of the Social Democratic Party (SPD), the constitution in the Constitution to relaxation of debt brake and infrastructure in the fields of infrastructure for investments needed to establish a fund of 500 billion euros.
In addition, the parties, in 2009 and the budget deficit of the country’s gross domestic product (GDP) does not exceed 0.35 percent of the rule of the government’s borrowing of the government’s borrowing of the “debt brake” for certain defense expenditures agreed to relax. With the agreement, the states will be given the opportunity to borrow more.
They announced at a press conference
The Christian Democratic Union Party (CDU) President Friedrich Merz, Chairman of the Christian Social Union Party (CSU), Markus Söder and SPD’s co -chairman Lars Klingbeil and SASKIA Esken announced at a press conference with Lars Klaingbeil and SASKIA Esken.
Merz, Germany in the fields of infrastructure in the fields of urgently needed investments in the establishment of a funding of 500 billion euros and loosening the debt brakes CDU/CSU and SPD parties, he said agreement was reached.
Emphasizing that the defense of Europe should strengthen Merz, “We must do whatever it takes in the face of threats. Considering the threats to our continent, our freedom and peace, it should be valid for us to defend whatever it takes.” He said.
GDP, exceeding 1 percent of the defense expenditures of the country will be exempted from the debt brakes of the country, Merz, the German economy in a short time to return to a stable growth path to improve the infrastructure should be improved.
“The funds necessary for this cannot be financed by the current budgets of the federal government, states and municipalities.” he said.
Friedrich Merz, CDU/CDU and SPD parliamentary group, the federal parliament will offer a constitutional amendment proposal to the lower wing of the federal parliament for loosening the debt brake.
Merz, CDU/CSU and SPD representatives will continue to negotiate on 6-7 March to make more decisions on budget, migration, competition, internal security and migration.
Based on Germany’s GDP in 2024, the exemption of defense expenditures exceeding 1 percent from the country’s debt brake covers all expenditures over 45 billion euros.
“We are aware of the magnitude of the upcoming tasks and we want to take the necessary first steps and decisions,” CDU President Friedrich Merz said. added.
The new government is waiting for a challenging economic environment
Meanwhile, the government, which has been faced with the largest economic crisis since the reunification of two Germany in 1990, is waiting for a challenging economic agenda.
The German economy fell by 0.2 percent in all 2024 compared to the previous year. Thus, the economy, increasing competition with China and structural problems with the braking of the economy, the second year shrunk in the second year. The economy contracted by 0.3 percent in 2023.
The country’s economy had recently experienced recession for two years in 2002-2003.
Economists and the German business world also call for a rapid establishment of the government and the necessary reforms in the economy, stating that crises have increased in the world.
In the country’s economic agenda, the debt brake focused focused on the agenda of the economy, the renewal of the transportation infrastructure, the digitalization of public administration, the increase in defense expenditures, the energy transformation, the digitalization and the high rents are leading.
While the Donald Trump administration in the US is preparing to reduce security investments in Europe and Ukraine, it is noteworthy that European countries are trying to activate hundreds of billions of euros defense funds.
Trump decided to stop all military aid to Ukraine and forced European countries to increase defense expenditures.
“European in the middle of a historical change”
Carsten Brzeski, Chief of Global Macro Research and German Chief Economist, said in his assessment that the next possible German government announced its major financial incentive plans and that CDU/CSU and SPD have made a significant change in the German politics and policies of political leaders.
“They also took an important lesson from the last German government in the coalition, which ultimately backs back the financial issues in the coalition. So today’s explanation shows the strongest intention of establishing a solid government coalition,” Brzeski said that both parties have removed the possible obstacles to the official coalition negotiations by agreeing on important financing issues. He said.
Brzeski pointed out that the change in the infrastructure fund and debt freen will benefit the German economy and said that a 500 billion euro infrastructure fund will meet the urgent needed investments and will increase the long -term growth potential of the German economy.
“As a result in the midst of a historical change in the last few days, the developments in the last few days, forced the next German government to make a historical move by explaining a financial package that could finally point to the beginning of better years for the economy.” commented. (AA)