The leader of the conservative CDU/CSU group, Friedrich Merz, stated during an appearance on German public broadcaster ARD that the upcoming German government will need to reduce expenses, despite his proposal for a €500 billion financial package (approximately $545 million) that involves borrowing. Merz, who is likely to be the next chancellor, indicated that cost cuts will be necessary across the federal, state, and local levels, as the financial margins have not increased.

This proposed financial package, which is notably controversial, includes a relaxation of Germany’s constitutional limits on debt. Despite this, the package has gained support from the center-left Social Democratic Party (SPD), which is in coalition negotiations with the CDU/CSU following the recent snap election. The package focuses on investments in defense and infrastructure. To come into effect, the package requires a two-thirds majority in both the Bundestag and the Bundesrat. It has already been endorsed by the Bundestag’s Budget Committee, amid expectations that the Green Party, given the allocation of €100 billion for climate change efforts, will also vote in favor.

However, there is opposition to the package, with several Bundestag members planning to challenge its ratification at the Federal Constitutional Court in Karlsruhe, arguing there hasn’t been sufficient discussion on the package’s societal impacts.

Merz acknowledged that the upcoming coalition negotiations with the SPD will involve difficult discussions regarding reforms and potential savings in the federal budget, emphasizing the need for savings. As for the timeline for establishing a new coalition government, Merz stated it’s too early to predict, though he hopes to be chancellor before Easter in mid-April.

Source: https://www.dw.com/en/germany-faces-cuts-along-with-financial-package-merz-says/a-71938751?maca=en-rss-en-all-1573-rdf