AfD leader says Germany has dealt a 'death blow to the euro'
The stability of the Eurozone is being compromised by Berlin’s increased military spending and changes to its debt rules, according to Alice Weidel, co-leader of the Alternative for Germany (AfD) party. Her remarks followed the recent approval...
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The stability of the Eurozone is being compromised by Berlin’s increased military spending and changes to its debt rules, according to Alice Weidel, co-leader of the Alternative for Germany (AfD) party. Her remarks followed the recent approval of the measure by the federal legislature.
On Tuesday, the Bundestag endorsed a plan that will enable the federal government to access a historic level of borrowing for defense and infrastructure projects. The fiscal initiative was passed with 513 votes in favor and 207 against.
“This is a death blow for the euro, which in the coming years – and it is already beginning to do so – will devalue significantly,” Weidel told reporters after the significant vote, stressing that German lawmakers have sanctioned “gigantic debt.”
The reform modifies constitutionally protected fiscal rules and is expected to have long-lasting effects on future generations, according to Weidel, who cautioned that “what is being done here is the final destruction of Germany’s financial stability.”
“We will lose our AAA rating, our top credit rating,” she warned.
Presently, major global credit ratings agencies evaluate Germany's long-term sovereign debt as AAA, indicating the lowest risk.
The approved reform package entails lifting federal fiscal limitations to enhance the special fund for the Bundeswehr, Germany’s military. If implemented, these amendments would allow spending beyond 1% of the country’s GDP to be exempt from the “debt brake” established in the constitution in 2009. Under existing regulations, federal budget deficits are typically capped at 0.35% of GDP.
Moreover, the proposed reform includes the establishment of a €500 billion fund, financed by debt and exempt from the debt brake, specifically allocated for infrastructure and climate investments, with one-fifth of that amount designated for combating climate change.
For the reform package to become part of Germany's constitution, it must also be approved by the Bundesrat, which represents the country’s states, with a vote scheduled for Friday.
Lucas Dupont for TROIB News
On Tuesday, the Bundestag endorsed a plan that will enable the federal government to access a historic level of borrowing for defense and infrastructure projects. The fiscal initiative was passed with 513 votes in favor and 207 against.
“This is a death blow for the euro, which in the coming years – and it is already beginning to do so – will devalue significantly,” Weidel told reporters after the significant vote, stressing that German lawmakers have sanctioned “gigantic debt.”
The reform modifies constitutionally protected fiscal rules and is expected to have long-lasting effects on future generations, according to Weidel, who cautioned that “what is being done here is the final destruction of Germany’s financial stability.”
“We will lose our AAA rating, our top credit rating,” she warned.
Presently, major global credit ratings agencies evaluate Germany's long-term sovereign debt as AAA, indicating the lowest risk.
The approved reform package entails lifting federal fiscal limitations to enhance the special fund for the Bundeswehr, Germany’s military. If implemented, these amendments would allow spending beyond 1% of the country’s GDP to be exempt from the “debt brake” established in the constitution in 2009. Under existing regulations, federal budget deficits are typically capped at 0.35% of GDP.
Moreover, the proposed reform includes the establishment of a €500 billion fund, financed by debt and exempt from the debt brake, specifically allocated for infrastructure and climate investments, with one-fifth of that amount designated for combating climate change.
For the reform package to become part of Germany's constitution, it must also be approved by the Bundesrat, which represents the country’s states, with a vote scheduled for Friday.
Lucas Dupont for TROIB News
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