The European Commission allows Germany to spend more, even if the budget exceeds EU rules. Berlin will increase investment in defence and infrastructure. It is the biggest budget move since reunification, Politico reported.
Germany receives approval from the European Commission for a massive budget increase. Under the plan, the first years will see an increase in deficit and public debt, the Commission nevertheless declared the proposal compatible with EU rules. As Politico reports, this is a crucial boost for Berlin at a time when it faces pressure to modernise its military and repair its ageing infrastructure.
According to the approved plan, the German deficit to reach 3.8 % of GDP in 2026, above the 3 % limit allowed by the EU. By 2029, it should fall to 1.9 %. Public debt will increase from 64 % of GDP to 66.5 % in 2029 and is expected to decline gradually thereafter. As Politico points out, the figures do not include extraordinary military expenditure.
Both the EU and the US have long been pressing Germany to strengthen its defences after the Russian invasion of Ukraine. Berlin has therefore launched the biggest rearmament since reunification. Germany's military budget will grow from 2.4 % of GDP in 2025 to 3.5 % by 2029. Politico, this move is of major geopolitical importance.
Brussels confirms that it will not open an excessive deficit procedure against Germany. Officials say the spending increase is only temporary and does not pose a threat to fiscal stability.
In order to comply with EU rules, Berlin has requested an extension of the budget plan from four to seven years. In return, it promised to reduce the administrative burden and allow more highly skilled migrants to come.
According to Politico, the European Commission has now completed its assessment of all the member states' plans. In November, it will publish a preliminary assessment of whether countries are on track to meet their commitments.
Politico/gnews.cz - GH
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