The decision prompted criticism that the Commission is turning a blind eye to Germany because it is the biggest and most powerful country in the EU.
Germany’s public debt and deficit — the difference between government revenues and costs — will spike over the coming years and decline in the long-term, according to the spending plan. The overarching goal is to reboot economic growth in Europe’s industrial heartland after years of stagnation.
The ratio between the deficit and gross domestic product is set to peak at 3.8 percent in 2026 — well above the EU’s 3 per cent limit — and shrink to 1.9 percent in 2029.
Meanwhile, Germany’s debt-to-GDP ratio will rise from 64 percent in 2025 to 66.5 percent in 2029, and decline thereafter, according to the plan. These figures do not account for increased military spending which is effectively exempted from the calculations.
The EU and the United States have been pressuring Germany to increase its defense spending in the face of Russia’s full-scale invasion of Ukraine. In the country’s most ambitious rearmament effort since reunification, Germany is set to increase its military budget from 2.4 percent in 2025 to 3.5 percent of GDP by 2029.
The Commission also confirmed that it won’t open an excessive deficit procedure — the bloc’s sanctions mechanism for over spenders — against Germany.