L’Allemagne ouvre toutes grandes les vannes des dépenses publiques

— What the coalition has resolved specifically is to boost spending on education, research and development to 10% of GDP. As a result, the Länder are to be allocated a total of EUR 6 bn in additional funding for the education system and the non-university-affiliated research facilities are to be granted a further EUR 3 bn, partly because the EU is probably going to extend the calculation of GDP in 2014 to cover intangible assets including research and development. Sticking to the R&D spending target of 3% of GDP is predicated on higher expenditures.
— Moreover, the municipalities will temporarily receive EUR 1 bn per year ahead of the full assumption by the federal government of the costs of integrating the disabled in the workplace, which will cost a total of EUR 5 bn in the final stage.
— The federal transport budget is to be increased by a total of EUR 5 bn to enable numerous investments to be made in the maintenance of the transport infrastructure. A further EUR 600 m is to be earmarked for urban renewal projects.
— Transfers for official development policy cooperation are to be raised by EUR 2 bn. The federal government also assumes the costs of integrating job-seekers in the labour market (EUR 1.4 bn).
In the fiscal space, the grand coalition is also quite rightly planning to tackle a broad reorganisation of fiscal federalism. This is every bit a necessity as much as an opportunity, for the currently applicable rules for important sections of the existing pact expire at the end of 2019. This is when benefits will cease to be paid by the Solidarity Pact II, designed to cover the special needs in east Germany dating back to Germany’s division. The case taken to the Federal Constitutional Court by the states of Bavaria and Hesse against the Länder financial equalisation system (roughly EUR 8 bn in dispute) will find political consideration. Problems of city-states and over-indebdted small Länder will have to be addressed. Reorganising regional policy from 2020 is an urgent matter not only because of changes to subsidy conditions in the EU. In addition, the provisions of the EU’s Fiscal Compact and Germany’s “debt brake” for the Länder – which are required to show structurally balanced budgets as of 2020 – will have to be applied and implemented in a way that is politically feasible. Furthermore, a Commission on fiscal federalism is to be set up which will also have the job of considering the future of the solidarity surcharge on income tax (2012 revenue: EUR 13.6 bn). Owing to its comfortable majority in the Bundes-tag and the fact that 15 out of 16 Länder governments are headed either by the CDU, the CSU or the SPD, the grand coalition has, in principle


How does the TPP have the potential to cause tension with China?

All those Asian countries are in like Flynn, but China is notably not playing ball.

When everyone signs this agreement, and no tariffs apply, then Chinese goods will go from the cheapest to the most expensive. Their entire economy is based on exports. Their entire economy is at risk.

The provisions deliberately exclude China. For example, yarn for clothing must come from member countries, and not from China.

This could potentially invite retaliation from China, an economic superpower in their own right.

– See more at: http://www.thedailysheeple.com/the-tpp-for-dummies_122013#sthash.IID1UDYu.dpuf