Germany’s parliament has voted in favor of a major fiscal package, including changes to debt policies and a 500 billion euro infrastructure fund. The reforms aim to boost Germany’s economy, which narrowly avoided recession last year.
To pass the law, more than two-thirds of parliament was needed, as well as approval from the Bundesrat, representing the country’s states. The package includes exemptions for loans taken on by the infrastructure fund and greater flexibility for German states on debt.
The proposed changes are seen as a significant shift away from Germany’s traditional fiscal policy. Analysts predict it could be a major boost to the economy, but warn that structural reforms will still be needed for sustainable growth.
Germany faces several economic challenges, including sustained infrastructure issues and issues in key industries like housebuilding and autos. The country is also under pressure from potential tariffs imposed by US President Donald Trump on European imports.
Source: https://www.cnbc.com/2025/03/18