Share :

Download PDF :

Politico (21 March 2025)

Hans von der Burchard, Clea Caulcutt and Tim Ross

European Union governments have expressed fears that the radical spending plans announced by Germany’s chancellor-in-waiting will end up skewing the bloc’s single market and could give the country an unfair competitive edge.

A month on from an election that made Friedrich Merz almost certainly the next leader in Berlin, the upper house of parliament is set on Friday to approve a historic change to the country's basic law to exclude defense investment above 1 percent of economic output from the nation’s strict spending rules, along with a €500 billion fund for infrastructure and green energy.

While Germany’s allies in Europe have broadly welcomed Berlin’s long-awaited loosening of the purse strings, there is a sense of unease about the impact it could have at a time when economies are still struggling to recover after the twin shocks of Covid and the Ukraine conflict, and with the looming threat of a trade war with the U.S.

 

Click for more