Germany plans to borrow approximately 20% more than initially anticipated in the coming months to finance a significant increase in spending. This includes securing a €46 billion ($53 billion) package of tax breaks, underscoring the growing need for debt.
The rise in third-quarter borrowing and the tax measures are part of Chancellor Friedrich Merz’s coalition government’s strategy to rejuvenate Germany’s sluggish economy and strengthen its armed forces. The cabinet has also approved this year’s budget and a mid-term financial plan, which projects net new borrowing of about €500 billion through 2029.
These efforts aim to address economic stagnation while ensuring sufficient resources for defense and growth initiatives.
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Germany to Sell More Debt to Fund Growth and Defense Plans
Germany will borrow about a fifth more than planned in the coming months to help fund a surge in spending, while a deal to secure a €46 billion ($53 billion) package of tax breaks highlighted how debt needs are set to grow.
The bump in third-quarter issuance and the tax measures are part of efforts by Chancellor Friedrich Merz ’s ruling coalition to revive Germany’s stagnating economy and bolster the armed forcesBloomberg Terminal. The cabinet also approved this year’s budget and the government’s mid-term finance plan, which includes net new borrowing of about €500 billion through 2029.