Germany to cut budget amid armament preparations

Germany’s likely next conservative chancellor, Friedrich Merz, said budget cuts should be discussed during coalition talks with the Social Democrats. This statement came after the announcement of a historic armament and infrastructure spending package.

Merz, of the CDU, said the next German government would have to cut costs despite the proposed 500-billion-euro debt-financed fiscal package.

“We will have to reduce costs at the federal level, at the state level, and in local communities. The margins have not become larger,” Merz told German public broadcaster ARD.

The landmark fiscal package also includes easing Germany’s constitutional debt brake on borrowing.

The spending plan is also supported by the Social Democratic Party (SPD), which is continuing coalition government talks with the CDU/CSU after last month’s early election.

The package includes investments in defense and infrastructure. The package requires a two-thirds majority in Germany’s lower house, the Bundestag, and upper house, the Bundesrat, to pass. The package has already been approved by the Federal Assembly Budget Committee.

The Greens, who initially opposed the package, are expected to vote in favor of it because 100 billion euros have been allocated to combat climate change. Merz hopes the constitutional amendments will be adopted before the new Federal Assembly takes office on March 25.

Some members of the Federal Assembly are planning to apply to the Federal Constitutional Court in Karlsruhe to block the vote on the multi-billion-euro fiscal package scheduled for Tuesday.

Independent member Joana Cotar has filed a lawsuit with the Karlsruhe court for the second time, demanding that the vote be postponed. The Constitutional Court confirmed on Sunday that the case had been accepted.

Three members of the Federal Assembly from the business-oriented Free Democratic Party (FDP) also said they would file an emergency application with the court, arguing that there was not enough time to publicly discuss the package’s impact on society.

According to FDP financial expert Florian Toncar, the current German government, consisting of the SPD and the Greens, has failed to answer “very simple and basic questions” regarding the package.

On the other hand, Merz also said that coalition negotiations with the SPD would involve “very difficult conversations” about much-needed reforms and what he described as “possible savings in the federal budget.” Merz argued that they would have to save money.

Referring to when Germany’s new coalition should be formed, Merz said it was too early to say and added, “We have not reached the end of the discussion. We have not yet reached the point of setting a date [for the new government].”

Merz wants to be chancellor before Easter in mid-April, about 50 days after the early election.