Politico reported that speaking to lawmakers of the Christian Democratic Union (CDU) on the morning of March 18 (local time), future German Chancellor Friedrich Merz said that the latest aid package for Ukraine, worth 3 billion euros, will be disbursed on March 21 after the German Parliament approves the constitutional reform as planned.
These changes are expected to meet an important request from outgoing Prime Minister Olaf Scholz, of the Social Democratic Party (SPD), when excluding defense and aid spending for Ukraine from the constraints of the deposit reduction mechanism.
Detailed information about the aid package will be released ahead of the summit between EU leaders in Brussels ( Belgium), scheduled to take place this weekend, to discuss support for Ukraine and strengthening European defense.
Scholz had previously delayed the aid during the run ahead of the German election on February 23. He argued that 3 billion euros in support for Kiev should rely on loans rather than the federal budget, and warned that if it cannot find new loans, Germany could have to cut pensions and social benefits.
Mr. Scholz's opinion was met with a strong wave of criticism. CDU senior fellow, Jurgen hardt, said this was an excuse to avoid supporting Ukraine.
According to Politico, the agreement between SPD and Merz's conservatives to expand the loan scale to 500 billion euros to invest in defense and infrastructure has prepared the current Scholz minority government to disburse the aid.
According to Reuters, after the reform plan was approved by the House of Representatives (Bundestag) on March 18, ong Friedrich Merz declared it as Germany's first major step towards a new European defense community. However, the bill still needs to be approved by the Senate (Bundesrat) on March 21.
head economist at Deutsche Bank Research, Robin Winkler, commented that this is a historic change in fiscal regime since Germany's reunification.
He noted that the next administration needs to implement structural reforms to prevent fiscal expansion from having a short-term impact without creating a solid foundation for the economy - like the period when Germany was unified in 1990.
At that time, the government spent a huge amount of money to rebuild and balance the economy between East Germany and West Germany, but the results were considered unsuccessful.
