German coalition approves controversial 2025 budget to boost economy
17 July 2024 19:01
After months of negotiations, the German coalition government has adopted the budget for 2025. Der Spiegel reported that the project, which has long been controversial within the coalition, can now be submitted to the Bundestag. Germany hopes that the country's economy will improve.
The federal government has announced the budget for the coming year. The project, as highlighted by the German media, has stirred much controversy and was the subject of lengthy negotiations between the coalition partners: Chancellor Olaf Scholz (SPD), Economy Minister Robert Habeck (Greens), and Finance Minister Christian Lindner (FDP). The Bundestag will pass it in the autumn.
Germany's budget for 2025 includes a record amount of 67 billion pounds for investments, which will be financed by a new loan of 38 billion pounds. As noted by Der Spiegel, the funds are needed to cover the additional costs of financing green electricity and providing money for citizens.
On Wednesday, German Finance Minister Christian Lindner said that Germany is adhering to the brake on increasing the budget deficit, making it a pillar of stability in Europe.
To stimulate the economy
The approved budget also includes a development package. The federal government intends to comprehensively stimulate Germany's weak economy (only "minimal growth" was recorded this year). The finance minister highlighted during the press conference that "this is an important impulse for economic policy, making Germany a more attractive place to conduct business".
The German government wants to encourage people to work harder and longer, including by introducing a tax break for overtime and skilled workers from abroad (for the first three years after coming to Germany). Changes are also planned regarding the contributions for employing pensioners.
Improvements are planned in the area of investment depreciation as well. The coalition government also wants to reduce bureaucracy and assist companies operating in energy-intensive sectors that have felt the rise in energy prices.
More money will also flow into the defence budget (54 billion euros) next year.
