WORLD NEWS FOR MONTENEGRO DIASPORA
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AUTHOR:M.J. GDNUS
The proposed spending package and debt limit reforms passed the Bundestag, with 513 votes in favor, more than the 489 needed for a two-thirds majority.
207 MPs voted against.
Outgoing Bundestag President Barbel Bass told MPs: “The law was passed with the required majority.”
The Basic Law will in future include provisions under which spending on defense, civil defense, intelligence services and cybersecurity will be exempt from the debt rule if they exceed one percent of normal GDP.
The sixteen federal states have also been given the option of having greater freedom to borrow in their future budget planning. Under the plan, total borrowing for the federal states will be limited to 0.35 percent of nominal GDP.
Perhaps the most important news is that a €500 billion “special fund” will be set up for additional infrastructure investments (such as railways, bridges and roads), which will be financed through loans. However, the funds can also be used for “additional investments to achieve climate neutrality by 2045”.
Germany now faces the next step, which is a vote in the Bundesrat, the upper house, where the law also requires a two-thirds majority, which it is expected to get.
The German newspaper Bild has already published the headline “Das Geld ist da” – the money is there.
Germany’s incoming Chancellor Friedrich Merz had planned to announce a €500 billion infrastructure fund and relax borrowing rules – which are protected by the constitution – through the outgoing parliament, where the parties supporting these proposals – his conservatives (CDU-CSU), the Social Democrats (SPD) and the Greens – appear to have the necessary two-thirds majority.
As Reuters reported, if the law passes the lower house of parliament, the Bundestag, it still needs to be approved by the upper house, the Bundesrat, which represents the governments of Germany's 16 states.
The main obstacle to its passage there was reportedly cleared yesterday when the Free Voters of Bavaria agreed to support the plans, securing a majority for the proposals.
