The agreement utilizes flexibility within the EU’s new fiscal rules, with Berlin committing to slow expenditure growth following a short-term investment boost.
“Due to investments in infrastructure, security, and defense this year and next, net expenditure in the German national budget will increase significantly,” the official stated. “Significantly lower growth in net expenditure is planned for the subsequent years.”
The plan seeks to balance investment, structural reform, and fiscal consolidation, as referenced in the Cabinet’s June 24 budget decisions. By the end of the planning period, the government intends to return to a more balanced path with “credible consolidation measures.”
The FSP also incorporates structural reforms that Berlin claims will increase government revenues over time, sending “a powerful signal for economic growth and sustainable public finances.”
Approval by the Cabinet is expected this Wednesday, including a statement from the Stability Council representing Germany’s federal states.












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