Analysts say that German tax return can be a “game changer” for the slow economy of the country

“Large, brave, unexpected – game changer for perspectives,” said Bank of America Global Research Economists and analysts in Wednesday's note, adding that the “significant” package changed the prospects of the German economy.

For several years, the German economy has been slowly shaky on the edge of technical recession, defined as two consecutive quarters of the decline in gross domestic product. Domestic GDP alternately expand and contraction in each quarter in 2023 and 2024.

The country is in the face of a wide range of problems, including infrastructure problems, the fighting home construction sector and pressure on some industries, which historically definitely contributed to its growth, such as cars.

Now there is hope for a change. They believe that the planned special investment vehicle could benefit the country's economy.

Markets can expect economic growth, and the estimates of Germany's growth can probably be increased, Florian Schuster-Johnson, a senior economist at Zernat Zukunft, said “Street Signs Europe” on Wednesday.

“I think that in a short period this will of course increase national demand, because there will be high demand for people building these new infrastructures and companies that () now receive new government orders,” he said.

Schuster-Johnson added that higher defense expenses can also have a long-term impact on the economy, which leads to an increase in production capacity, which can ultimately also deal with civil use.

It could exceed the Germans above the current NATO goal spent 2% GDP for defense, the research economists of Deutsche Bank say on Tuesday.

“Today's solid rhetoric suggests that an open defense loan room will be used at a pace that could bring German defense expenses to at least 3% perhaps next year,” they said.

Merz suggested that geopolitical development showed that serious means should be taken to strengthen the possibilities of security and defense in Europe.

“In the light of threats to our freedom and peace on our continent,” whatever you need “, now it must also follow our defense,” he added, according to CNBC translation.

While political ads would be largely beneficial, other budget and budget plans from the likely new coalition are to come and can have their own influence on Germany's economy, noticed the global head of Makro Carsten Brzeski.

“We would not rule out that official coalition talks will still bring some cuts of expenses, which will reduce the positive impact of the fiscal stimulus announced,” he said.

Elsewhere, the legislator Bernd Baumann, who is part of the German far -right alternative party Fuer Deutschland, told Reuters that the party was conducting a preliminary legal review of the announcement and reserved the right to take action.

By passing detailed information, a special investment fund worth EUR 500 billion will not be part of the federal budget, but will be financed via a loan without a contribution to a new debt. Funds are to be used within 10 years, focusing on transport, energy, education, civic protection and other infrastructure. Federal countries will also be allocated some funds to support their finances.

To avoid cash subject to a debt brake, the fund will be rooted in the constitution and released usually fiscal.

At the moment, the debt brake limits how much debt can take, and decides that the size of the federal government budget deficit cannot exceed 0.35% of the annual GDP in the country.

One key change in the new plan is that defense expenses that go beyond 1% of Germany will not be calculated in relation to the restriction of the debt brake, which means that such expenses will no longer be limited.

German countries will also be able to take a larger debt than before, and long -term proposals for modernizing the debt brake and strengthening the investment will also be undertaken.

The proposed debt brake review also means a serious transition from the CDU-CSU election campaign, during which the pages have repeatedly positioned as wanting to stick to the era of Angeli Merkel. Merz finally suggested that he could be open to some reform.