German government averts crisis with budget agreement for Europe’s largest economy
The German government has announced an agreement on its budget for 2025 and a stimulus package for Europe’s largest economy, easing a monthslong squabble that threatened to upend Chancellor Olaf Scholz’s center-left coalition
BERLIN — The German government said Friday it has reached agreement on the budget for 2025 and a stimulus package for Europe’s largest economy, easing a monthslong squabble that threatened to upend Chancellor Olaf Scholz’s center-left coalition.
Scholz, a Social Democrat, and leaders of the Free Democrats and Greens reached agreement on plans including higher spending on defense and affordable housing after marathon talks that dragged into the early hours of Friday. Scholz said ministers would formally approve the plan at a Cabinet meeting later this month.
By balancing security, social cohesion and economic growth, Scholz said the budget was designed to reassure citizens unsettled by the war in Ukraine, the impacts of climate change and irregular migration, and offer an alternative to the “divisive” policies of far-right parties making gains across Europe.
“We don’t need ‘either-or’ politics,” Scholz said. “We need support for Ukraine and stable pensions, the modernization of industry and affordable energy, a strong army and good roads and stable bridges.”
Scholz replaced long-serving conservative Chancellor Angela Merkel after federal elections in 2011, heading a coalition built around a program of modernization and digitalization in areas including climate protection, infrastructure and research.
To help pay for it, the administration sidestepped rules limiting public borrowing by repurposing 60 billion euros ($65 billion) in unspent emergency credits raised for measures to soften the impact of
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