“The Upper Chamber of the German Parliament has supported a historical decision to weaken the constitutional “debt brake”, which opens the path to unprecedented government spending on defense, infrastructure and climate protection. About it reports Der Spiegel. This reform was the final stage of the long legislative process, which was accompanied by intensive discussions and legal challenges by various political factions. Now, after approval by federal lands”, – WRITE ON: ua.news
The Upper Chamber of the German Parliament has supported a historical decision to weaken the constitutional “debt brake”, which opens the path to unprecedented government spending on defense, infrastructure and climate protection.
About it reports Der Spiegel.
This reform was the final stage of the long legislative process, which was accompanied by intensive discussions and legal challenges by various political factions.
Now, after the federal lands are approved, changes to the Constitution are expected only to formal verification and signature of President Frank-Walter Steinmeier, which is expected next week.
The approved financial package provides for the possibility of borrowing up to 500 billion euros to finance critical areas, such as defense, civil protection, intelligence services and cybersecurity.
According to the new provisions, expenses exceeding 1% of the gross domestic product of Germany (approximately 44 billion euros in 2025) can be financed by loans.
This significantly changes the fiscal strategy of the country, which since 2009 has been limited by the stringent rules of the “debt brake”, which allowed the federal government a structural deficit of not more than 0.35% of GDP.
Voting proved to be successful: 53 votes for 46 of 69 total votes (two -thirds). Interestingly, support came even from lands, where the Government is involved in the “left” party, which is traditionally critical of increasing defense costs.
The peculiarity of this reform is also the allocation of 100 billion euros directly to the federal lands, which will allow them to take debts of 0.35% of GDP for the first time (about 15 billion euros). Prior to this event, the land was limited by the strict zero debt limit.
It is worth noting that not all lands have a “debt brake” in their constitutions-only in the northern Rhine-Westphalia, Berlin, Thurini and Saar there is no such restriction.
The proposal to weaken the “debt brake” was put forward by the Christian-Democratic Union (CDU) and the Social Democratic Party of Germany (SDPN), which tried to quickly reform through the parliament, which completes its cadence.
There were fears that the plan could be blocked in the new parliament after the deputies who fundamentally oppose this plan were received in the February Elections.
The Green Party supported the reform after promising to include 100 billion euros of investment in climate projects.
We will remind, the Minister of Foreign Affairs of Germany Annalen Berbok announced the restoration of the work of the German embassy in Damascus, which was closed since 2012 through the Civil War.
We have also recently reported that German Chancellor Olaf Soltz said Berlin would increase military assistance to Ukraine to € 7 billion. This week, the Bundestag adopted “a very comprehensive amendment to our Constitution, which will allow us to finance what is needed to protect our country, to cooperate in Europe for defense, as well as for military assistance we need to mobilize for Ukraine.”
