In a significant session, the Federal Council addressed a comprehensive agenda, primarily focusing on legislative proposals that have emerged from recent parliamentary discussions. Central to the deliberations was the unanimous approval of the 'Investment Booster' law, designed to stimulate corporate investment through substantial tax relief measures. This initiative includes expanded depreciation options and plans to gradually reduce the corporate tax rate, ultimately aiming for a total tax burden of approximately 25% by 2032. The federal government has committed to compensating local authorities for any revenue shortfalls arising from these changes.
Additionally, the council reviewed the allocation of a new special fund intended for infrastructure and climate protection initiatives, with a proposed distribution of 100 billion euros to various states from an overall fund of 500 billion euros. While the legislation received positive feedback, calls for amendments were made concerning the eligibility of certain projects for funding, highlighting the importance of collaboration between federal and state levels.
Chancellor Friedrich Merz emphasized the need for collective efforts to rejuvenate Germany, advocating for enhancements in competitiveness, speed, and digital infrastructure. He acknowledged the significant challenges posed by geopolitical shifts and underscored the urgency of strengthening national security and infrastructure. Merz also announced a shift in migration policy, indicating tighter border controls and increased deportations until EU asylum reforms are enacted. The session marked a pivotal moment in addressing both economic and social issues facing the country.
