Billions of package: Union and SPD are planning record investments for Germany!

Billions of package: Union and SPD are planning record investments for Germany!

In the current exploratory talks between the Union and the SPD, a special fund of a special fund is considered. This should serve to strengthen the infrastructure and defense spending. With a proposal to adjust the debt brake, defense expenditure that is over 1% of the gross domestic product is to be excluded from this regulation. This could theoretically enable unlimited loans, report ZDF.de

Financial key data and necessities

The existing special fund for the Bundeswehr of 100 billion euros is almost completely planned. Defense officer Eva Högl estimates that a total of 300 billion euros are required to compensate for misconceptions. The regular defense budget is currently around 53 billion euros, while from 2028 85 to 90 billion euros may be required to achieve NATO's two percent target. These additional funds would be necessary to ensure a war -compatible Bundeswehr with full equipment in the areas of air defense, cyber defense, precision weapons and drone army.

At the same time, it already looks urgent in the infrastructure sector. The BDI estimates that around 160 billion euros are required to modernize the rail network, highways, bridges and public transport. CSU boss Markus Söder describes the planned package as unique in German history and sees the decisions a way to create a reliable financing perspective and planning security. These loans are to be procured by bonds on the capital market, the repayment should then be made from the federal budget.

political challenges

The discussion about debt brake has taken back into speed in view of the new explorations. This regulation, which has been anchored in the German Basic Law for 15 years, has the goal of not excessively burdening future generations. While the advocates of the debt brake argue that it forces them to make financial discipline, opponents criticize that they hinder necessary public investments. In this context, the IW (Institute of German Economy) outlined three reform variants, which could also be part of the current political discussion. These variants include a net investment rule and a breathing debt rule that could react more flexibly to economic changes.

In the given circumstances, the prospect of reforming the debt brake and the implementation of the special fund remains exciting. There is no question of the need for sensible public investments. It remains to be seen how the exploratory talks continue and whether the Union and SPD, possibly with the help of other parties, can implement their plans. The infrastructure is not only holey, there is also massive catch -up needs in defense, which is now to be addressed with a strategic plan.