(de-news.net) – In a step toward recalibrating Germany’s economic trajectory, the Bundesrat has unanimously ratified the Bundestag’s immediate investment package, signaling unified federal and state support for an ambitious agenda of fiscal stimulus, regulatory reform, and industrial modernization.
The cornerstone of the initiative – the so-called ‘growth package’ – was prominently endorsed by Chancellor Friedrich Merz (CDU) in his inaugural address to the Bundesrat. Invoking themes of national renewal and cooperative governance, Merz framed the legislation as a strategically necessary intervention to restore Germany’s global competitiveness and ensure resilient macroeconomic development. He stressed that streamlined regulation, enhanced digital infrastructure, and increased bureaucratic efficiency are essential to catalyzing new investment and expanding productive capacity.
Central to the Chancellor’s economic rationale is the assertion that revitalization would yield distributive fiscal benefits across all levels of government – federal, state, and municipal – thereby fortifying the country’s socioeconomic architecture. In particular, Merz emphasized the need to reposition Germany as a magnet for private capital inflows, arguing that a conducive investment climate is critical for fostering entrepreneurship, operational efficiency, and technological innovation.
The legislative framework deploys two principal fiscal mechanisms: a temporary reinstatement of accelerated, declining-balance depreciation allowances – up to 30 percent – for capital goods between 2025 and 2027, and a phased reduction of the corporate tax rate from 15 percent to 10 percent by 2032. Together, these measures are designed to increase liquidity among firms, stimulate reinvestment, and strengthen Germany’s appeal to foreign investors.
Complementary provisions include substantial incentives for the acquisition of electric corporate vehicles, with a 75 percent first-year depreciation allowance and an elevated price eligibility cap of 100,000 euros. These provisions apply to purchases made between mid-2025 and the end of 2027. Moreover, the research and development tax subsidy will be expanded, with its qualifying base raised from 10 million euros to 12 million euros for the 2026–2030 fiscal period, reflecting the government’s intent to accelerate innovation-led growth.
While the program entails estimated public revenue losses of 48 billion euros through 2029, the Federal Government has pledged full compensation for municipal shortfalls and partial reimbursement to state administrations, thereby assuaging concerns of fiscal asymmetry and reinforcing intergovernmental solidarity.
