Support the German Parliament On Tuesday, there is a plan to increase government borrowing limits because the largest economy in Europe is looking to strengthen spending on defense and infrastructure.
Bundestag agreed Several modifications To the country’s constitution, allow federal governments and state governments in the future with more debts. This will be able to spend the higher defense and 500 billion euros for the infrastructure to enhance the military capabilities of the European Union (European Union).
The German counselor, in waiting, suggested that Fredres Mirz have defensive spending because the European Union is increasingly concerned about the American commitment to the security of Europe. President Donald Trump Criticism of the European Countries not to meet their commitment to NATO 2 % of gross domestic product Annually by 2024, threatening to reassess the American commitment to the military alliance.
“We have at least a fake feeling of safety,” Mirz He said Bondstag Bit Parliament on Tuesday. “Peace profits were used after the war long ago, and there was a need to rebuild the defense capabilities in Germany,” he added.
In an interview with the public broadcaster ARD on Sunday, Mirz He said “The situation has worsened in recent weeks.” He referred to Trump’s initiatives to Russia to end the Ukrainian war and his reluctant commitment to NATO.
“That is why we have to act quickly,” Mirz said. He urged the amendment of the constitution to exempt defensive spending after that 1 % of gross domestic product.
German decisions pushed European markets to the top
Stoxx 600 Pan-European closed 0.61 % higher on Tuesday, with most sectors and all the main ports in positive lands. Dax German Corporaates Rheinmetall, Bayer, Thyssenkrup and Continental have been traded in the news.
DAX increased by 16.76 % on an annual basis, outperforming its American counterpart, S&P 500, by more than 20 %.
About 513 Parliament Members voted in favor of constitutional changes, while 207 voted against them. More than two -thirds of Parliament members need to vote to change the basic law of Germany to reduce debt brakes.
The decision to increase public investment and relaxation is constitutionally devoted to allowing the higher defense spending “he sends a clear message to Europe that Germany is determined to invest in the defense”, Chairman of the European Union Committee Ursula von der Lin He said.
The bloc in the center of the Christian Democratic Union (CDU) and the Christian Social Union (CSU), along with the social Democrats in the left (SPD) and Greens, the package.
The Bonarat, a body that represents the countries of the country, will meet on Friday to vote on the law. Only then will become dedicated to the German constitution.
German economy is restricted to “debt brakes”
The German government spending it Historical Through “debt brakes”. The new annual borrowing borders restricted 0.35 % of GDP. If Germany amends its constitution, it will allow the government to borrow more 1 euro Trillion During the next decade.
“The following federal government will only have a choice of little public investments in the defense capabilities,” Deutsche Bank Research Institute books On March 13. “This effort cannot be funded within the boundaries of the debt brake without affecting other basic government tasks and thus risking public support.”
The Merz’s CDU and its brother party won 28.6 % of national votes on February 23. He pledged to form an alliance government in April.
Economic start The Deutsche Bank Research Institute said the Bank of Bank. “If the current situation continues, it is possible that the German economic growth will remain less than 1 % annually until the end of the contract.”
On Sunday, the Parliamentary Budget Committee in Germany approved plans to increase the state’s borrowing to support defense and revive growth significantly.
The committee held an extraordinary session and supported the plans – agreed on Friday between the conservative CSU, the social democrats, and the Greens – they sent them to Parliament for adoption.
German economic feelings rise on fiscal policy
Before the parliament vote, German economic morale expectations have risen to its highest levels since January 2023.
The ZEW index for the economic feeling of March has risen to 51.6 points or 25.6 points above the previous month’s reading. The last time the index increased significantly in January 2023.
Source: Zio
“It is possible that the mood is likely to be the most brighter due to positive signals regarding future German financial policy,” said on Tuesday, including the financial package of billions of euros for the federal budget. “The horizons of minerals and steel manufacturers as well as the mechanical engineering sector improved”
On March 12, S& P Global’s global survey showed a slight improvement in the mood between Germany’s business during the first quarter of the year. “Optimism has returned to the country’s manufacturers,” said S& P Global.
“However, growth expectations were defeated, in the midst of geopolitical tensions,” said S& PLOBAL. She said that companies expected to be strong pressure, and in this way, they were cited with plans to reduce the workforce amid concerns about competitiveness.
Germany faces strong opposite winds despite financial change
Germany still faces the great opposite winds. These include, among other things, population aging, high energy costs, poor productivity, and the emergence of China as an industrial competitor.
The GDP contracts 0.2 % in 2024, according to the data of the Federal Statistical Office (Destatis). Disatis said that investments decreased by 2.7 % in the fourth quarter, compared to the same quarter in the previous year.
Analysts questioned Germany’s commitment to financial reform and defensive spending. They refer to 100 billion euros from 500 billion euros for climate change rather than increasing energy supplies.
Michael A wrote. Airout, Economy, Politics and Investor Analyst “instead of reopening its nuclear power plants x. “One cannot compensate.”
After the decision of Parliament, Arouet wrote: “Rip German Industry”.
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