German Parliament Approves 2025 Budget
Germany Approves 500 Billion Euro Special Fund in Controversial 2025 Budget
In a move that has sparked debate among political parties, the German Bundestag has approved a special fund totalling 500 billion euros for various investments in the country's economy and infrastructure. The budget, set at approximately 502.5 billion euros, is set to stimulate the struggling economy and lay the foundation for comprehensive modernization.
The Finance Minister, Lars Klingbeil of the SPD, defended the budget against criticism, stating that the government's priority is to bring economic growth back to Germany, secure jobs, and create future jobs. He emphasized that the special fund would be utilized for various projects over a period of twelve years, including repairing bridges and railway tracks, expanding energy infrastructure and digitalization, funding hospitals, research and development, sports facilities, construction projects, and education.
However, not all political parties are in agreement. The Green party leader, Sebastian Schäfer, criticized the use of the special fund, stating that the investments planned by the Union and SPD offered far too little future perspective. He argued that the funds should be used to invest in sustainable and long-term projects that would benefit the country in the long run.
The SPD parliamentary leader, Thorsten Rudolph, dismissed these accusations and spoke of an unprecedented investment package that would lay the foundation for comprehensive modernization. He highlighted the budget for work and social affairs, which receives the largest allocation, around 190 billion euros, and the allocation for pension insurance, approximately 122.5 billion euros.
Defense spending is set to increase significantly due to the tense geopolitical situation, with the defense budget for 2025 approximately 62 billion euros, and an additional 24 billion euros from the military special fund. Former Bundestag member Sahra Wagenknecht warned that the sharply increasing military spending could threaten social peace.
Unemployment benefits, including citizen's income, are allocated around 52 billion euros. However, the government faces a financing gap of more than 30 billion euros by 2027. Billion-dollar loans from special funds for military and infrastructure are part of the budget. Of the 500 billion euros in debt-financed funds, 100 billion goes into the climate and transformation fund for climate protection projects, and 100 billion goes to the states.
The Green and Left parties accused the federal government of trickery instead of investing in budget planning, and the AfD demanded that fewer debts should be incurred. Federal Chancellor Friedrich Merz spoke of a "difficult task" in explaining austerity measures to the citizens, and debates on tax increases and social reforms have already begun.
The new borrowing is estimated to reach around 143 billion euros, a level last seen during the corona crisis. The government aims to stimulate the economy with these billion-dollar investments, but the long-term impact and the financing gap in the future remain concerns for many.
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