Germany’s constitutional court has rejected opposition parties’ challenges to a plan by the government to ease debt rules and set up a 500-billion-euro infrastructure fund. This decision allows parliament to proceed with the proposal, which aims to revive ailing growth and boost defense spending.
The proposal is part of a massive public borrowing initiative, which was approved by lawmakers from the Greens party last week. The plan has already survived earlier legal challenges and has the backing of the SPD party, which is in talks to form a coalition government.
However, the opposition parties argue that there is not enough time for scrutiny, with many experts predicting a difficult economic outlook for Germany. A recent forecast by the Ifo Institute predicts a 0.2% growth rate this year, citing weak demand and pressure from international competition.
The Organisation for Economic Co-operation and Development (OECD) has also cut its 2025 German growth forecast to 0.4%, while the economy ministry has warned of high levels of domestic and foreign policy uncertainty.
Despite these concerns, the government is confident that the plan will pass, with only two-thirds majority needed to approve constitutional amendments. A parliamentary vote on Tuesday will determine the fate of the proposal.
Germany faces significant economic challenges, including weak consumer sentiment, reluctance to invest, and pressure from international competition. The decision by the constitutional court paves the way for parliament to push ahead with the plan, which aims to address these issues and stabilize the economy.
Source: https://www.reuters.com/world/europe/germanys-top-court-receives-more-complaints-against-debt-vote-plan-dpa-reports-2025-03-17