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POLITICS

German government sets out plans for €60 billion ‘future’ fund

Germany's new government is planning to earmark 60 billion euros to fund 'future investment' including its plans to tackle climate change, Finance Minister Christian Lindner said on Friday.

Finance Minister Christian Lindner
Finance Minister Christian Lindner (FDP) sets out the coalition's plans to invest heavily in the transition to renewable energy on Friday, December 10th. Photo: picture alliance/dpa/POOL AP | Michael Sohn

The funds will be taken from debts approved to help the government tackle the coronavirus pandemic but which “have not been used”, said Lindner in his first major announcement since taking office on Wednesday.

The government had signed off a plan to borrow €240 billion in 2021 to finance measures to lessen the impact of the pandemic on businesses but will now only need 180 billion euros.

Germany’s coalition government of the Social Democrats, Greens and liberal FDP has pledged that the expansion of sustainable energy will be “drastically accelerated and all hurdles and obstacles will be removed”.

They plan to phase out coal and source 80 percent of the country’s energy from renewable sources by 2030, with the aim of achieving carbon neutrality 

With an eye on the powerful automotive industry, the parties have also resolved to put 15 million fully electric cars on the road by 2030, up from just over 500,000 currently.

Lindner said the new funds would also be used to invest in the “digitalisation” of the German economy.

During the coalition negotiations, the centre-left SPD and the Greens had initially proposed more flexibility on fiscal policy.

But Lindner’s pro-business FDP succeeded in pushing for a tougher stance on public finances.

The coalition has promised a return to the so-called debt brake — a rule enshrined in the constitution that normally limits Germany’s public deficit to 0.35 percent of overall annual economic output — by 2023.

The debt brake was lifted to help fight the coronavirus pandemic.

“Only by ensuring stable finances can we meet the requirement of fairness between the generations,” Lindner said on Friday.

READ ALSO: KEY POINTS: Germany’s next government unveils coalition pact

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POLITICS

‘Russia must not win this war,’ says Germany’s Scholz

German Chancellor Olaf Scholz pledged once again to stand with Ukraine against Russia - but said Ukraine's bid to join the EU cannot be sped up.

'Russia must not win this war,' says Germany's Scholz

Scholz said the war in Ukraine was the greatest crisis facing the EU in its history, but that solidarity was strong. 

“We are all united by one goal: Russia must not win this war, Ukraine must prevail,” Scholz said in the speech to the Bundestag on Thursday.

Putin thinks he can use bombs to dictate the terms for peace, the SPD politician said. 

“He’s wrong. He was wrong in judging the unity of Ukrainians, and the determination of our alliances. Russia will not dictate peace because the Ukrainians won’t accept it and we won’t accept it.”

Scholz said it was only when Putin understands that he cannot break Ukraine’s defence capability that he would “be prepared to seriously negotiate peace”.

For this, he said, it is important to strengthen Ukraine’s defences. 

Scholz also pledged to help cut Europe free from its reliance on Russian energy. 

The Chancellor welcomed the accession of Finland and Sweden to Nato. “With you at our side, Nato, Europe will become stronger and safer,” he said.

However, Scholz dampened expectations for Ukraine’s quick accession to the EU.

“There are no shortcuts on the way to the EU,” Scholz said, adding that an exception for Ukraine would be unfair to the Western Balkan countries also seeking membership.

“The accession process is not a matter of a few months or years,” he said.

Scholz had in April called for Western Balkan countries’ efforts to join the EU to be accelerated amid a “new era” in the wake of Russia’s invasion of Ukraine.

Last October, EU leaders at a summit in Slovenia only reiterated their “commitment to the enlargement process” in a statement that disappointed the six candidates for EU membership — Albania, Bosnia, Serbia, Montenegro, North Macedonia and Kosovo – who had hoped for a concrete timetable.

“For years, they have been undertaking intensive reforms and preparing for accession,” Scholz said on Thursday.

“It is not only a question of our credibility that we keep our promises to them. Today more than ever, their integration is also in our strategic interest,” he said.

The chancellor said he would be attending the EU summit at the end of May “with the clear message that the Western Balkans belong in the European Union”.

Scholz also called for other ways to help Ukraine in the short term, saying the priority was to “concentrate on supporting Ukraine quickly and pragmatically”.

France’s President Emmanuel Macron has also said it will take “decades” for a candidate like Ukraine to join the EU, and suggested building a broader political club beyond the bloc that could also include Britain.

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