BERLIN (AP) – As Europe’s largest economy sticks to rules to limit borrowing halted by the coronavirus pandemic, the German cabinet on Wednesday sees an exception for spending cuts, including defense, in 2024. Approved the budget.
The government’s plan calls for spending of €445.7 billion ($486 billion), 6.4% below the €476.3 billion expected to be spent this year.
Defense spending is expected to rise by 1.7 billion euros to about 51.8 billion euros, well short of the defense minister’s initial request.
Germany is set to meet the NATO target of spending 2% of its gross domestic product on defense next year, a goal that has long fallen short of reaching the €100 billion goal set up for Germany. This was achieved with the support of the Special Fund of modernize the german army After the Russian invasion of Ukraine. Berlin aims to reach his target through a regular budget later this year.
“Security, economic prosperity and future industrial fitness, climate neutrality and cohesion are the most important features of budgets, but of course the challenge is the fact that many budgets have grown accustomed to the big side in recent years. Prime Minister Olaf Scholz told lawmakers about the pandemic and the impact of Russia’s war on Ukraine.
Scholz’s three-party coalition will return this year to adhere to Germany’s so-called debt brake, which allows new borrowing to just 0.35% of annual gross domestic product (GDP).
It may be suspended to deal with natural disasters or other emergencies beyond the control of the state, and will be used to fund various aid and stimulus packages for three years after the start of the COVID-19 pandemic in 2020. It was to allow a large amount of borrowing to
Finance Minister Christian Lindner and pro-business Liberal Democrats were particularly keen to save to comply with these rules, and the coalition agreed not to raise taxes as they argued.
Lindner told reporters the government was “starting to normalize the budget”, sending a “clear signal that Germany is committed to a long-term sustainable public finance”.
The German parliament is expected to approve the final version of the budget in December.
