BERLIN, July 5 (Xinhua) -- After weeks of deliberations, Germany's ruling coalition on Friday reached a preliminary agreement on a draft budget for 2025, averting a crisis that threatened to break up Chancellor Olaf Scholz's government.
Friday's agreement also includes initial financial plans for the following years.
Total expenditure in 2025 will amount to 481 billion euros (519.5 billion U.S. dollars), Scholz told a press conference. This includes 44 billion euros in new debt, still within the limits of the so-called debt brake that forbids excessive borrowing.
Investments will rise from 53 billion euros this year to 57 billion euros in 2026. "With this budget, we are creating security and stability in times characterized by unrest and uncertainty," Scholz said when presenting the plans.
Germany is seeking to meet the North Atlantic Treaty Organization (NATO) target of investing 2 percent of gross domestic product (GDP) in defense. Spending in this area is set to reach 80 billion euros annually by 2028. Investments in internal security and climate change adaptation are also to be increased.
"This is by no means what is sometimes publicly referred to as an austerity budget," Finance Minister Christian Lindner told the press conference. "The level of investment in particular shows this," he said, adding that the focus is on education, external and internal security, and easing the burden on citizens.
A planned tax relief for citizens over the next two years will amount to 23 billion euros. An additional 1 billion euros is earmarked for families next year, while state aid for vulnerable children as well as the general child benefit is to increase by five euros per month.
Following the mild recession last year, Germany's economy is to be boosted with a governmental growth package intended to raise the country's GDP by 0.5 percentage points. Further details are to be announced in the coming weeks.
The country's industry generally welcomed the economic stimulus provided by the budget. "However, the bottom line is that this is not enough to sustainably strengthen growth," warned Tanja Goenner, managing director of the Federation of German Industries. (1 euro = 1.08 U.S. dollars) ■