German Government Averts Crisis With Budget Agreement

The German government has reached an agreement on the budget for 2025 and a stimulus package for Europe’s largest economy, easing a months-long squabble that threatened to upend Chancellor Olaf Scholz’s center-left coalition, Stephen Graham reported for the Associated Press (AP).

Scholz, a Social Democrat, and leaders of the Free Democrats and Greens reached an agreement on plans that include higher spending on defense and affordable housing. I Photo: Copyright: Thomas Imo, photothek.net / German Presidency of the European Parliament Flickr

Scholz, a Social Democrat, and leaders of the Free Democrats and Greens reached an agreement on plans that include 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, offering 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.”