14 March | Euro

Bloomberg: Merz defends plan to boost German government borrowing

Bloomberg: Merz defends plan to boost German government borrowing

Ahead of a key vote, Germany's prospective chancellor Friedrich Merz defended his emergency plan to finance significant government spending with debt. He has faced cross-party criticism for attempting to allocate funds before the new parliament convenes. The proposal calls for constitutional amendments to ease borrowing restrictions in order to support defense and infrastructure spending, Bloomberg reported.

On Thursday, Merz emphasized the benefits of his strategy, citing a potential increase in Germany's effectiveness as an international partner. However, negotiations with the Green Party have complicated the plan's progress.

Katharina Dröge, co-leader of the Green party, accused Christian Democratic Union leader Friedrich Merz of misleading voters for political gain. At the same time, Dröge emphasized her party's readiness to continue discussions.

According to Bloomberg's experts, the inability to reach an agreement could hinder future coalition talks. This situation also raises increasing doubts about Merz's ability to lead the recovery of the German economy, which has been contracting for two consecutive years.

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