Germany to return to austerity with 6.4% spending cuts foreseen by 2024

alemania ampelmann

BancaMarch: The German Council of Ministers on Wednesday approved the draft budget for 2024, in which it plans to return to the path of fiscal consolidation and which envisages an increase in defence spending and cuts in all other departments, among which the most affected are transport, science and the family.

Spending will thus have to fall by 6.4%, from €476.3 billion in 2023 to €445.7 billion the following year. The deficit is estimated at €16.6 billion, which means that the device known as the debt brake, anchored in the German constitution, will once again be applied. This debt brake stipulates that, in times of economic normality, the deficit may not exceed 0.35 per cent of GDP. In recent years, pandemic-related spending and the energy crisis had led to an interruption in the fulfilment of this constitutional mandate.

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