Friedrich Merz and his central rights Christian Democrats are victorious on Sunday at Germany's election, but the celebrations may be short. The next government, with quite a certainty by Mr. Merz as a Chancellor, is faced with a stagnating economy, the threat of President Trump, the decisive export industries of the country and a fourth year of war in Ukraine.
In addition, the ability to approach these problems is due to strict limits of the public debt and the deficits, which makes it difficult to finance higher military expenses, update the crumbling infrastructure and to carry out other initiatives that say economists for growth are of crucial importance.
A dispute over this rule, known as debt brake, brought the government of Chancellor Olaf Scholz from the Social Democrats of Center links, which paved the way for the early elections on Sunday. However, the relaxation of the rule would require a two-thirds majority in parliament to change the constitution, and the election result indicates that it would be difficult to raise so much support.
Already on Monday, Mr. Merz stood with calls from other politicians, economists and even the traditional conservative central bank, so that the new government finds a way to adapt the expenditure limits for the urgent economic requirements of the country.
“In principle,” wrote the Bundesbank on Monday in a report, “it is only justified to adapt the loan border of the debt brake to changing conditions if the public debt rate is low.” The German government's public debt is a little more than 60 percent of gross domestic product, far lower than in countries such as Great Britain, France and the United States, where the debts are close or more than 100 percent of GDP
After the election on Sunday, the two-party coalition hopes that Mr. Merz between his Christian Democrats, who won 208 seats, necessary to change the constitution.
Parties on the extreme-die left on the left and the alternative for Germany or AfD on the right gained enough seats to give them a blocking majority in parliament with 630 seats. This limits the options for the new government, which inherits a budget of 2025 with a hole of 13 billion euros or 13.6 billion US dollars.
Mr. Merz worked with the AfD. This means that he would have to persuade the left to spend on the military.
The Greens, who were in fourth place with 85 seats, offered another solution. On Monday, they demanded Mr. Merz and the parties of the abandoned government – the Social Democrats, the Greens and the Free Democrats (which have no seats in the next parliament) either a special defense fund or a loosening of the debt brake in the 30 days, which the current parliament for has left the adoption of legal provisions.
However, Mr. Merz refused to comment on the proposal, but indicated a general openness to examine such a step and pointed out that Parliament had used the window in the past immediately after an election to adopt laws with which military arissions were involved abroad.
“Our considerations are not over yet,” said Merz, adding that the German military would need “a lot more money”.
But several economists who support the initiatives have questioned timing and democratic legitimacy of such a step. This includes Jörg Kukies, the exhaustive finance minister, who is a social democrat.
“Firstly, there is far too little time, and secondly, it would also be a questionable political signal if constitutional changes were made with an old majority,” Kukies told Reuters.
Apart from the relaxation of the debt brake, the new government has to react to calls from managing directors to help Germany the Trump administration.
“Business is expecting a stable government and a real economic change,” said BDI, a powerful organization for industrial lobby, in a statement on Monday. “Isolated corrections and improvements no longer meet the seriousness of the situation; Instead, politics has to focus on strengthening the growth forces. “
These forces show that companies, economists and others reduce energy costs, reduce stressful regulations, invest more in the infrastructure and accelerate the digitization of public services.
German economic growth was also hindered by political paralysis and generation of uncertainties. Almost a third of the voters who were interviewed by public television a week before the election.