Germany’s Merz strikes debt deal to fund defence and infrastructure

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Fredetic Mirz, Germany’s advisor, agreed to an agreement with his partner’s potential coalition to inject hundreds of billions in additional financing in the military structure and military structure in the country, which represents the “sea change” in the conservative approach in the country in borrowing.
In a declaration that came shortly after a week of his victory in the federal elections, Mirz said that his Christian Democratic Union (CDU), and its Bavarian brother and socialist Democrats (SPD) will submit a draft law in Parliament next week to relax in the country’s debt brakes.
The ruling will exempt defensive spending above 1 percent of GDP of debt brake bases, allowing Germany to increase spending on its armed forces with an unlimited amount at a time when Europe faces the possibility of the United States, which has paid its security since Donald Trump began a second presidential term.
Future coalition partners will make another constitutional amendment to create a 500 billion euros -infrastructure fund, which will last more than 10 years. They are also planning to relieve debt rules of the states.
“I want to say this very clearly in light of the threats of our freedom and peace on our continent, our defense must be applied now [the stance of]Mirz, standing alongside the party leaders of the Democratic Democratic Party and the Bavarian Christian Social Union at a press conference in Berlin on Tuesday.
He added: “An additional spending on defense cannot be dealt with unless our economy returns to a stable growth within a very short period of time. This requires fast and sustainable investments in our infrastructure.”
The bills need a two-thirds majority in Parliament to pass, which means that Mirz will have to revive the outgoing Punstag, which was elected in 2021-and securing the support of the vegetables.
The plan represents an amazing shift in the traditional conservative approach in Germany for public borrowing. In 2009, Berlin devoted debt brakes in its constitution, limiting government borrowing and maintaining the structural deficit at 0.35 percent of GDP.
Economists and defense specialists welcomed the decisive step.
“This is a financial change of the sea for Germany,” said Holgar Schmiding, the chief economist in Bernberg. “Mirz and his coalition rise to this occasion.”
Jana Bougherreen, the European Higher Policy Fellow, said that Mirz had “realized the exceptional situation.”
“He went up the pace, and showed sufficient flexibility to allow SPD to appear and lay the foundations for a coalition capable of taking action,” she added.
Jeans Sudkum, a professor of international economics at Heinrich Hein University of the University of Dusseldorf, who urged Mirz to reform debt brakes, described the announcement as a “total change of games”.
Mirz, who has carried out a campaign against a position on opposition to the reforms of the debt brakes in the period before the February 23 elections, the coalition talks with the Social Democratic Party since then since then Trump photographed Ukraine President Volodimir Zelinsky. At the White House last week.
The initial deal paves the way for a broader alliance agreement with SPD. The next German advisor wants to use the outgoing parliamentary delivery to pass the constitutional amendments because his government is likely to be banned in the next parliament by the extremist right. An alternative to Germany The left left is dies.
The current parliament can be held until March 25, before the new deputies can occupy their seats.
The deal with SPD came at a time when the European Commission was identified on Tuesday, a common debt tool that enables member states to finance the purchase of military equipment.
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2025-03-04 20:04:00