S exploures: what the union of the Union and SPD means

They are gigantic sums – and a surprise: the Union and SPD not only want to create a special fund for investments in the infrastructure, but also want to collect the debt brake for defense spending. The Union had recently excluded this. However, votes from Greens or FDP are necessary for a decision in the Bundestag.

What exactly is the suggestion?

The debt brake, anchored in the Basic Law, is to be adjusted in such a way that defense expenses are excluded that is over one percent of gross domestic product. This should not be capped, so theoretically enables unlimited loans.

In order to manage this financially, the economy should be stimulated – by investing in the infrastructure, i.e. streets, rails, bridges and other things. For this purpose, loans of 500 billion euros are to be taken up that flow into a special fund. For comparison: this is a little more than the volume of a federal budget and more than a tenth of the German gross domestic product. The money should be available quickly and drain over ten years. In order for this to be passed on by the debt brake, the special fund should be anchored in the Basic Law and excluded from the debt rule.

In addition, the countries should also have the opportunity to make more debts. Their debt brake, which is so far particularly strict, is to be adapted to the somewhat more flexible federal regulation.

What opportunities do the plans in the Bundestag have?

The Union and SPD cannot decide on this alone, because a two-thirds majority is required for changes in the Basic Law. In the old Bundestag, this would work together with Greens or FDP. So far, the FDP has categorically rejected a reform of the debt brake. The explorers should therefore rely on the Greens.

In the new Bundestag, which is constituted on March 24th or 25th, the Union, SPD and Greens no longer have a two-thirds majority. Left and AfD can block a change in the Basic Law – and they both reject special funds. Therefore, the old Bundestag should come together again on the last few meters.

Why is more money necessary for the Bundeswehr?

The special fund of over 100 billion euros for the Bundeswehr is almost completely planned. It is already clear that the way to defenders is still wide. As early as March 2023, the military officer Eva Högl said: “The 100 billion euros alone will not be enough to compensate for all wrong stocks, but in the opinion of military experts, it would require a total of 300 billion euros.”

To the size: The regular defense budget consists of around 53 billion euros and only fulfills NATO’s two percent target because the previous special fund is included. According to Defense Minister Boris Pistorius, a total of 85 to 90 billion euros a year, according to Defense Minister Boris Pistorius, is required for the two percent goal alone, so it is 120 billion euros for defense expenditure of three percent. With the way about an exception to the debt brake, a path is now being taken, which Pistorius has repeatedly demanded.

What can you pay with the additional money for the Bundeswehr?

A torture Bundeswehr, which can be deterred and can insist on the attacker and in a fight, requires full equipment beyond 100 percent (“replacement”), extensive air defense and cyber defense and improved, independent observation of possible opponents (“education”). In addition, far -reaching precision weapons (“deep precision strike”), stocks of ammunition, a kind of drone army and a functioning home protection beyond the previously planned new division. The staff for this should also be fed by a new military service, with barracks and accommodations currently the bottleneck. The previous special fund has a closely exposed purpose and limited investments in infrastructure. Still completely unclear: Germany could participate in the event of an agreement on the nuclear deterrent potential of France and Great Britain.

Why does the federal government need so much money for the infrastructure?

Ailing bridges and rails, construction sites on streets: there is a huge investment backlog with the transport infrastructure. “Goods and passenger traffic is now significantly restricted by the outdated infrastructure, which affects the economic development of Germany,” says the annual report of the “economy”. The Federal Association of German Industry has calculated that additional funds of around 160 billion euros are necessary for the rail network, motorways and federal roads, bridge renewal, federal waterways, for ports and the expansion of public transport. The BDI also sees an additional 100 billion euros for the educational infrastructure, i.e. for daycare centers, schools and universities as well as 56 billion euros for buildings and living.

CSU boss Markus Söder spoke of an economic and infrastructure package “XXL” that the size was unique in Germany. It is also about strengthening energy supply, construction, childcare, digital schools and hospitals.

What could a special fund could cause infrastructure?

So far, investments in the infrastructure must be negotiated every year during the conversations about the federal budget – i.e. according to the cash register, depending on the economy and tax revenue. A special fund creates a reliable financing perspective and planning security for clients, engineering offices and the construction industry.

Special funds offer the advantages to use financial average and to use clearly defined targets and to create planning security for infrastructure projects, according to the main association of the German construction industry. “A long-term package could finally free the construction of an ecological and future-proof infrastructure from the annual budgetary,” said Greenpeace traffic expert Lena Donat. The Interest Association Allianz Pro Schiene sees the chance to reduce the gigantic renovation backlog at the rail.

Who ultimately has to pay the loans?

The state gets fresh money by issuing bonds on the capital market. First of all, the money comes from investors, for example, pension funds or credit institutions can be. One of the largest investors in the world is the Norwegian state fund. In the long run, however, the loan must be repaid. In the event of a special fund, the federal government sets up a schedule for this. For the previous special fund for the Bundeswehr, the repayment is planned, for example, from 2031. The money for this must then come from the federal budget, i.e. from taxpayers and other government income.