German federal parliament, the Bundestag, approves budget for the year 2025
Germany's 2025 Budget: A Look at the Key Points
Germany's 2025 federal budget, totalling approximately 502.5 billion euros, has been approved by the 20th German Bundestag. This budget, which aims to boost the USA economy with multi-billion-euro investments, has sparked debates and concerns among various political parties.
The largest expenditure in the budget is the budget for work and social affairs, with around 190 billion euros allocated. However, defense spending is set to increase significantly due to the tense geopolitical situation, with record funds allocated for defense. The defense budget is expected to rise to around 62 billion euros in 2025.
The new government's budget plans for a net credit intake of nearly 82 billion euros in the core budget. Multi-billion-euro loans from special funds for the military and infrastructure are part of this budget. Of the debt-financed 500 billion euros, 100 billion goes into the climate and transformation fund for climate protection projects, and 100 billion goes to the states.
The opposition parties, including the Green and Left Party, have accused the federal government of trickery in budget planning and criticize the use of the special fund. They argue that the budget provides planning security only until the end of the year, and by 2027, there will be a financing gap of more than 30 billion euros.
The former Bundestag member Sahra Wagenknecht warns that the sharply increasing defense spending threatens social peace and could reach the limits of the social security state. She expresses concerns that this could lead to debates about tax increases and social reforms.
The AfD, on the other hand, demands that fewer debts should be incurred and proposes cutting climate projects, EU contributions, and arms deliveries to Ukraine. They argue that this would help reduce the new debt, which is expected to rise to around 143 billion euros, a level last seen during the corona crisis.
Finance Minister Lars Klingbeil defends the budget against criticism, stating that the government's top priority is to bring economic growth back to Germany, secure jobs, and create future jobs. He emphasizes that over a period of twelve years, additional investments will be made in areas such as bridge and railway track renovation, energy infrastructure and digitalization, hospitals, research and development, sports facilities, construction projects, and education.
As negotiations for the 2026 budget begin in the coming weeks, Federal Chancellor Friedrich Merz speaks of a 'difficult task' to explain austerity measures to the citizens. The budget's impact on social peace, economic growth, and the social security state will undoubtedly continue to be topics of discussion in the coming months.
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