The Reichstag building early in the morning.
Paul Zinken/DPA | Picture Alliance | Pictures of getty
The Bundestag de Germany will vote for a major tax package later, which includes changes in long -term debt policies to allow for greater defense expense and an infrastructure and a climate fund of € 500 million ($ 548 billion).
More than two thirds of Parliament must support the package so that it is passed and ended in the Constitution of Germany. The law must also be passed by Bundesrat, a body that represents the states of the country, on Friday.
By virtue of the new proposed laws, the defense and some security costs above a certain threshold would no longer be subject to the debt brake, which limits the amount of debt that can be assumed and dictates the size of the deficit of the structural budget of the federal government.
The loans assumed as part of the infrastructure fund would also be exempt from debt brake, while the states of Germany would also have more flexibility around the debt.
The Christian Democratic Union, along with its German party, the Christian Social Union, which jointly won most of the national elections in Germany in February, proposed fiscal change in collaboration with the Social Democratic Party. It seems that the factions form the Government of the incoming coalition, and the tax reform package is a by -product of conversations about a possible government collaboration between them.
A tight vote
The pressure of time to approve the reforms is high, as they require changes to the Constitution, which means that it must gain the support of two thirds of both the Parliament and the Bundesrat. This is only possible before the new Parliament, elected in February, joins for the first time next week, as the parts opposed to the fiscal package will have a greater part of the vote and could block the plans.
Some of the parties opposed to reforms have also unsuccessfully launched legal challenges to make it difficult to vote.
At the time of Tuesday voting, CDU-CSU and SPD also had to negotiate for the support of the German Green Party, according to a commitment It includes 100 billion euros from the infrastructure fund that is assigned to efforts of climate and economic transformation and an extension of the issues related to security exempt from debt brake.
If all members of Parliament who were part of the CDU-CSU, SPD and Green Party support the package, there would be a 31 votes buffer to get most of the two thirds needed for the Bundestag to pass the reform.
A momentum for the economy?
Analysts and economists generally reacted to the initial announcement of the plans earlier this month, considering them as a potentially important impulse to the economy in the struggle of Germany.
The German economy bordered a technical recession, which is defined by two consecutive quarters of economic contraction, during 2023 and 2024, but has been stagnant effectively.
It Scholars On Monday, he said that he was now projected the gross domestic product of Germany to grow 0.4% annually this year, below the previous forecast of 0.7%. German Economic Institute Ifo In the meantime, he said he was reducing his prospects for the country’s economy to the growth of 0.2% year -on -year.
It occurs as Germany faces sustained infrastructure problems, as well as problems in key industries such as housing construction and autos. The country also fights against the threat of possible rates imposed by the President of the United States, Donald Trump, to imports in the United States from Europe, which could be especially difficult for Germany due to its high trade levels with the United States.
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