94Ha Viewpoint
According to the German Handelsblatt on the 5th, Merz, who is expected to become the next German Chancellor, said that the CDU and the SPD agreed to invest 500 billion euros as a special investment fund and will reform the debt brake mechanism to increase federal defense investment.
According to the report, in view of the current situation facing Germany, Merz said that Germany will “at all costs” strengthen its national defense. In this regard, the leader of the CSU and the governor of Bavaria, Soder, said, “In terms of security, there are no restrictions now, and all materials needed by the German Armed Forces will be purchased.”
The Bundestag will hold a meeting next week, when the CDU and the SPD hope to amend the debt brake mechanism stipulated in the Basic Law and launch a defense and infrastructure fiscal spending plan. In the future, all defense expenditures exceeding 1% of gross domestic product (GDP) will no longer be restricted by the debt brake mechanism. According to Germany’s current economic level, 1% of GDP is about 44 billion euros. In addition, the defense budget will continue to increase significantly before the special funds for the German Federal Armed Forces expire in 2027 at the latest, in order to achieve NATO’s goal of 2% of GDP. According to sources, the figure may be 3% of GDP (132 billion euros). In addition to increasing defense spending, the two parties plan to approve a special investment fund of 500 billion euros next week, which is expected to last for ten years. Merz said that by increasing investment, German companies and the economy will return to the growth track.
German “Der Spiegel” magazine said that in the face of the ever-changing international situation, Merz is leading Germany to change. Although the cabinet has not yet been formed, the two sides have achieved initial success in the negotiations. If the plan can be successfully passed by the Bundestag, the CDU and the SPD will have more room for negotiation. Defense Minister Pistorius expressed satisfaction with the results of the negotiations between the two parties. As early as during the campaign, he said that Germany should increase federal defense spending. Many German scholars also expressed support for this.
According to data released by German data company Statista in February this year, Germany’s defense spending in this year’s draft budget is about 53 billion euros, of which about 2.5 billion euros will be used for military procurement. The defense budget ranks second as in the previous year, accounting for about 10.9% of total federal spending. In 2022, the Bundestag passed a special fund of 100 billion euros for the German Federal Armed Forces. This fund will be used gradually in the next few years but will not be included in the total federal budget.
