German parliament votes on fiscal plans that could bring historical reforms


The Capitol building is in the early morning.

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German federal goods will vote on major fiscal packaging later on Tuesday, including changes to long-term debt policies to achieve higher defense spending and €500 billion ($548 billion) of infrastructure and climate funds.

More than two-thirds of parliaments need to support the plan to pass and be shaped by the German constitution. The law will then also need to be passed by Texas law on Friday, which represents the state.

Under the proposed new law, certain thresholds above defense and certain security spending are no longer subject to debt braking, which limits the debt government can bear and determines the size of the federal government’s structural budget deficit.

As part of the infrastructure fund, the loans obtained will also be exempt from debt braking, and German states will also have greater flexibility in debt.

Together with its sister party, the Christian Social Alliance, jointly won the largest vote in the German national elections in February and proposed a fiscal shift in cooperation with the Social Democratic Party. These factions seem likely to constitute an incoming coalition government, with fiscal reform plans being a byproduct of negotiations on potential management partnerships between them.

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German fiscal package

If all members of the MP who belong to CDU-CSU, SPD and Greens will support the plan, there will be 31 vote buffers to achieve the two-thirds majority required for Bundestag to pass the reform.

Promote the economy?

Analysts and economists responded positively to the overall initial announcement of the plan earlier this month, a potential boost to Germany’s struggling economy.

Throughout 2023 and 2024, the narrow technological recession of Germany’s economy was defined by two consecutive economic contractions, but effectively stagnated.

this OECD Germany’s GDP is now expected to grow by 0.4% per year this year, lower than the previous projection of a 0.7% expansion, it said on Monday. German Institute of Economics ifo It is also saying it is reducing the outlook for the country’s economy to 0.2% of year-on-year growth.

This is because Germany faces ongoing infrastructure problems, as well as problems in major industries such as housing construction and automobiles. The country is also battling potential tariff threats imposed by U.S. President Donald Trump on U.S. imports from Europe – which is particularly difficult for Germany due to its high level of trade with the United States



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