On Tuesday, March 18, the Bundestag voted for the Act, thanks to which expenses for strengthening the Bundeswehr above 1 percent. GDP will be excluded from the restrictions of the budget anchor. It was also voted for the creation of a non -budgetary fund in the amount of 500 billion eurowhich is to be allocated within 10-12 years for infrastructure. Now the Act will go to the Bundesrat, the High Chamber of German Parliament, of which 69 members are represented by trade union countries. As in the Bundestag, the constitutional change must be approved by 2/3 of the votes.
Germany must hurry. From March 25, the Bundestag composition will look different due to the results of the election from last month. If the project fails to vote until then, the chances of supporting the CDU and SPD initiative will be much smaller. The Greens were reluctant to support the act. To vote “for” they convinced them that EUR 100 billion from a special fund will be allocated to energy transformation.
So it arises questionwhether the Bundesrat manage to vote the act over the next week. Marina Guldimann, from the German Non Profit Fiscalfuture organization dealing with public finances, points out that trade union countries have been organizing for several weeks to vote for constitutional changes. The most important voting, says Guldimann, took place in Bavaria, which determined that the reform would be ahead of the reform. – Most gathered in both the upper and lower chamber. The chances that the law will be voted, so they are very large – says our interlocutor.
A revolutionary change in Germany and its three pillars
Marina Guldimann explains that, in fact, Germans will be able to freely increase the debt if this concerns defense expenses. – we send a signal to all European partners that we intend to significantly increase investments In army – says the expert. As he explains, the Germans at the national level did the same as the European Union, which also excluded defense expenses from the excessive deficit procedure.
The second element of the voted act is EUR 500 billion per infrastructure. For decades, the Germans were tied with strict fiscal rules. They neglected the development of the country, and in recent years they even fell into a recession. Marina Guldimann explains that these EUR 500 billion is subject to numerous conditions that will guarantee that these funds will be spent fair, among others for green transformation. – Investments in infrastructure will be very large, because Germany needs to build new bridges and renovate old roads – says the expert.
The last element of the voted act is money for lenders, which were mainly trade union countries towards the government. Marina Guldimann claims that the total government coalition under the leadership of Olaf Scholz collapsed because she was unable to communicate about government expenditure. – They could not agree on how they intend to finance the projects they planned, especially in the face of pressure from Trump's administration to increase defense expenses – says our interlocutor.
The new government coalition between the CDU and SPD understood that no German government would be stable now, if he did not answer questions about financing expenses first, and that's what we witnessed today
– says Guldimann.
The third year of recession is flying. The new law can put her end
The Germans have already entered the third year of the recession. However, the announcement of huge expenses, according to economic forecasts, will allow our western neighbors to get out of economic collapse – says Guldimann. He adds that the economic climate in Germany was disturbing, among others due to unrealized needs of large investments.
People had the impression that they live in a country where nothing works in which roads are broken, in which bridges require renovation. Therefore, the stability of the government, which shows that it wants to invest, will definitely help the German economy
– says Guldimann.
The expert adds, however, that the Germans need long -term stability and must make sure that the signals sent to German companies will allow them to gain their trust. This would allow not only public, but also private investments – believes Guldimann. Our interlocutor is also convinced that in the long run it will be necessary to carry out a reform regarding public debt. Because although an additional hundreds of billions for investment in infrastructure are an important signal for business, as the expert believes, these investments should also be excluded from budget expenditure.
What does the new law mean for Poland?
Marina Guldimann claims that in the context of Poland the most important is the part regarding defense expenditure. – I know that Poland has been putting pressure on Germany for a long time to increase investments in this sector, especially since the full -scale invasion of Ukraine – says our interlocutor. He adds that the voted act is an important signal that Germany is ready to increase defense expenses under NATO side by side with your allies.
– We also know that the future Chancellor Friedrich Merz to warn relations with Poland so that the relations of our countries are even closer during the presidency of Donald Trump – he concludes.