The approval and implementation of Germany's new infrastructure and defense spending plan involve several key steps, both political and administrative. Here’s an outline of the necessary steps:
1. Drafting and Proposal of the Plan
The German government (typically led by the Chancellor and the Finance Ministry) drafts the detailed proposal, including budget allocations and funding mechanisms.
Consultation with economic experts, industry representatives, and relevant ministries to refine the plan.
2. Parliamentary Debate and Approval
Bundestag (Federal Parliament): The plan must be presented and debated in the Bundestag, Germany’s lower house of parliament.
Constitutional Amendment: Since the plan involves adjusting Germany’s “debt brake” (Schuldenbremse), a constitutional amendment may be required. This needs a two-thirds majority in both the Bundestag and the Bundesrat.
Bundesrat (Federal Council): The upper house of parliament, representing the states (Länder), must also approve any constitutional changes or financial arrangements impacting state budgets.
3. Negotiations with Political Parties
Coalition and Opposition Talks: Since the ruling coalition may not have the required two-thirds majority, negotiations with opposition parties (especially the CDU/CSU) will be necessary.
State-Level Discussions: Some aspects of infrastructure projects require coordination with state governments.
4. Legal and Financial Structuring
Establishing a legal framework for the €500 billion infrastructure fund.
Determining mechanisms for funding, such as issuing government bonds or redirecting budget surpluses.
Ensuring compliance with EU fiscal rules and regulations.
5. Market and Stakeholder Reactions
Gathering input from investors, financial institutions, and international economic organizations.
Addressing concerns about inflation, debt levels, and the potential impact on Germany’s credit rating.
6. Implementation Phase
Creation of oversight committees to monitor spending and project execution.
Allocation of funds to specific projects (transport, digital infrastructure, energy, defense).
Regular audits and progress reports to ensure transparency and accountability.
7. Adjustments and Future Legislative Revisions
Reviewing the economic impact of the plan and making adjustments if necessary.
Possible revisions based on political changes or unforeseen economic conditions.
1. Drafting and Proposal of the Plan
The German government (typically led by the Chancellor and the Finance Ministry) drafts the detailed proposal, including budget allocations and funding mechanisms.
Consultation with economic experts, industry representatives, and relevant ministries to refine the plan.
2. Parliamentary Debate and Approval
Bundestag (Federal Parliament): The plan must be presented and debated in the Bundestag, Germany’s lower house of parliament.
Constitutional Amendment: Since the plan involves adjusting Germany’s “debt brake” (Schuldenbremse), a constitutional amendment may be required. This needs a two-thirds majority in both the Bundestag and the Bundesrat.
Bundesrat (Federal Council): The upper house of parliament, representing the states (Länder), must also approve any constitutional changes or financial arrangements impacting state budgets.
3. Negotiations with Political Parties
Coalition and Opposition Talks: Since the ruling coalition may not have the required two-thirds majority, negotiations with opposition parties (especially the CDU/CSU) will be necessary.
State-Level Discussions: Some aspects of infrastructure projects require coordination with state governments.
4. Legal and Financial Structuring
Establishing a legal framework for the €500 billion infrastructure fund.
Determining mechanisms for funding, such as issuing government bonds or redirecting budget surpluses.
Ensuring compliance with EU fiscal rules and regulations.
5. Market and Stakeholder Reactions
Gathering input from investors, financial institutions, and international economic organizations.
Addressing concerns about inflation, debt levels, and the potential impact on Germany’s credit rating.
6. Implementation Phase
Creation of oversight committees to monitor spending and project execution.
Allocation of funds to specific projects (transport, digital infrastructure, energy, defense).
Regular audits and progress reports to ensure transparency and accountability.
7. Adjustments and Future Legislative Revisions
Reviewing the economic impact of the plan and making adjustments if necessary.
Possible revisions based on political changes or unforeseen economic conditions.
Note
Here are the exact dates related to the supposed implementation process March 13, 2025: Presentation of Constitutional Amendments in the Bundestag.
March 18, 2025: Debate and Vote in the Bundestag.
March 21, 2025: Vote in the Bundesrat.
On my chart they are not exactly stated as here due to the fact that you have make your move before every stage, but at least be awaere whats the next oone on the time-horizon.
Note
Every european 10Y bond market yield change GERMAN;FRENCH;SPAIN;- Italy does not matter currently since its not really vought by real investors rather than by ECB only...Note
Altough AFD already signaled that they are not happy with the plan i dont really believe that they will make barriers.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.