(CLO) Germany's future Chancellor Friedrich Merz declared on Friday that "Germany is back", after reaching an agreement to sharply increase the public debt ceiling.
Merz’s conservative Christian Democratic Union (CDU) and the Social Democrats (SPD) are in talks to form a coalition government after last month’s election. They have proposed a 500 billion euro ($544 billion) infrastructure investment fund and a debt ceiling amendment to bolster defense and spur growth in Europe’s largest economy .
Conservative Christian Democratic Union (CDU) Friedrich Merz. Photo: X/Friedrich Merz
With the support of the Greens, the coalition is likely to secure the two-thirds majority needed to amend the constitution, breaking with decades of German fiscal austerity. The vote on the proposal is scheduled for next Tuesday (March 18).
Mr Merz stressed the need to pass the package as soon as possible, especially in light of changing US policy under President Donald Trump. He warned that a hostile Russia and an unreliable US could leave Europe vulnerable.
“Germany is back. Germany is making an important contribution to the preservation of freedom and peace in Europe,” Mr. Merz said at a press conference. He wants the package approved before the new parliament convenes on March 25, 2025, when the far right and far left could make it difficult.
The compromise with the Greens includes allocating €100 billion from the €500 billion infrastructure fund to the Economic and Climate Transition Fund.
The three parties, the conservatives, the SPD and the Greens, have agreed that all of the money must be spent on new programmes, not to cover budget deficits, over the next 12 years.
Despite the deal, Mr Merz faced criticism from the opposition, including some Greens, who accused him of “misleading voters” because he pledged not to expand spending during the election campaign, but proposed seismic fiscal changes just days after his victory.
Mr Merz cannot afford to lose too many votes in Tuesday's vote, as the conservative coalition, the SPD and the Greens are just 30 votes short of the minimum needed to amend the constitution.
If passed, the reforms would mark a major change to the "debt brake" rule - a measure introduced after the 2008 global financial crisis to limit Germany's budget deficit.
Cao Phong (according to DW, Reuters)
Source: https://www.congluan.vn/thu-tuong-sap-toi-cua-duc-tuyen-bo-nuoc-duc-da-tro-lai-post338635.html
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