The EU’s growing dependency on joint debt was highlighted by the chancellor, who noted it’s “permissible as an exception” but has become “the new normal.”
Germany has traditionally been opposed to EU borrowing that is supported by all 27 governments, primarily due to concerns that Berlin could be liable for debts incurred by more spend-oriented countries. However, during the peak of the Covid-19 pandemic, Germany conceded to allow it as a one-time measure to aid economic recovery.
Commission officials proposed that a permanent EU crisis fund might be financed similarly, but Germany’s resistance seems strong once more.
“The European Union must basically make do with the money it has available,” stated the conservative leader. “That is why there will be a pretty tough struggle over the next two years.”
The Commission has put forward a €1.816 trillion central EU budget spanning seven years from 2028, marking a significant increase in spending power compared to the current budget since 2021.
To support this expenditure, the EU executive introduced three new taxes on electronic waste, tobacco products, and high-turnover companies to cover the post-Covid debt, estimated to cost €25 to €30 billion annually.
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