Germany’s ruling coalition leaders have reached a consensus on a draft budget for 2025, emphasizing increased support for families, investments in kindergartens, and climate protection. The successful negotiations between Chancellor Olaf Scholz, Economy Minister Robert Habeck, and Finance Minister Christian Lindner averted a potential snap election that could have benefitted the far-right.
The €470 billion budget includes measures to support Ukraine, pension reform, improved infrastructure, economic growth, and job security. Notably, defense spending will increase to meet NATO’s 2% GDP target. Despite criticism, the coalition plans to adhere to Germany’s debt brake in 2025, underscoring responsibility and economic stability.
The draft budget also proposes higher child benefits, investments in daycare centers, and tax deductions for families. To incentivize employment, employer contributions for pensioners returning to work will be paid as wages. Additionally, welfare initiatives aim to support the long-term unemployed.
While the coalition faces opposition, the draft budget reflects a pragmatic approach to fiscal management and social welfare. The final decision on the budget is expected in late 2022, maintaining Germany’s economic resilience amidst global uncertainties.