EU approves Germany’s multi-year spending and investment plan

Germany has reached an agreement with the EU on a multi-year fiscal plan that commits to increasing the country’s investments while tightening spending in subsequent years.

The agreement specifies how Germany will increase its spending until 2029 while remaining within the framework of renewed EU rules aimed at ensuring fiscal stability within the bloc.

“In constructive discussions with the European Commission, the German government has agreed on a multi-year roadmap for the maximum permitted growth in general government net primary expenditure for the years 2025-2029,” an official stated.

The deal utilizes the flexibility in the EU’s new fiscal rules, with Berlin committing to slowing the pace of spending after a short-term investment boost.

“Due to investments in infrastructure, security, and defense this year and next, net expenditures in the German national budget will increase significantly. A significantly lower growth in net expenditures is planned for the following years,” the official said.

The plan, which references the Cabinet’s budget decisions on June 24, aims to strike a balance between investment, structural reform, and fiscal consolidation. At the end of the planning period, the government intends to return to a more balanced path supported by “credible consolidation measures.”

The fiscal plan also includes structural reforms that Berlin says will help increase government revenues over time and send a “strong signal for economic growth and sustainable public finances.”

The plan is scheduled to be approved by the Cabinet on Wednesday and will include a statement from the Stability Council, which represents Germany’s federal states.