{"text":[[{"start":10.24,"text":"The German economy will only slowly recover from more than four years of stagnation as Chancellor Friedrich Merz risks bungling his €1tn debt-funded investment drive, the country’s top economic advisory body has warned."}],[{"start":27.979999999999997,"text":"In a scathing assessment of Berlin’s spending plans, the German Council of Economic Experts — which provides independent advice to the government — said the country’s GDP growth would edge up from 0.2 per cent this year to only 0.9 per cent in 2026, below the government’s projection of 1.3 per cent."}],[{"start":52.01,"text":"The five-member panel of academic economists warned the implementation of Merz’s fiscal push, intended to boost defence and infrastructure, needed “significant improvement” and that under the plans “substantial funds are replacing regular budget expenditures”."}],[{"start":70.78999999999999,"text":"Some of the new fiscal leeway was being used to pay for “dubious measures” such as higher pensions for non-working mothers and bigger tax incentives for commuters, the council said in a 600-page annual economic report presented at a press conference in Berlin on Wednesday afternoon."}],[{"start":90.82999999999998,"text":"“The opportunities arising from [the debt-funded investment funds] must not be squandered,” said the council’s chair Monika Schnitzer."}],[{"start":99.47999999999999,"text":"The criticism echoes similar concerns raised by the Bundesbank and two economic think-tanks that a sizeable portion of the government’s debt-funded investment is being used for areas that should be funded from the ordinary budget."}],[{"start":114.80999999999999,"text":"Under current spending plans, roughly half of the borrowing that is supposed to be used for additional investment will, in fact, be spent on government consumption, the council’s calculations show."}],[{"start":127.50999999999999,"text":"“The positive macroeconomic effects under the current spending path remain limited,” it said, adding that government debt could nonetheless rise to more than 85 per cent of GDP by 2035, compared with 63 per cent this year."}],[{"start":145.95,"text":"Unless the government changed tack, “growth opportunities could be lost, and the long-term debt sustainability of the German state could be jeopardised”, the report said."}],[{"start":157.63,"text":"The council also warned the nation’s manufacturing base “is increasingly falling behind” its global competitors."}],[{"start":165.23,"text":"When taking delivery of the report in Berlin, Merz stated his coalition was determined to increase Germany’s long-term growth potential by increasing investment, cutting red tape and lowering taxes. “We are striving to fundamentally improve the economic situation,” he said, adding the country’s growth “has been too weak for many years”."}],[{"start":190.07,"text":"The finance ministry has previously rejected the criticism levelled at it by the country’s central bank and think-tanks, including the German Economic Institute and Ifo, arguing that its budgets were in line with rules set out when the country this year loosened its constitutional borrowing limit for infrastructure and defence spending."}],[{"start":214.54999999999998,"text":"The council’s forecast for GDP growth next year is 0.1 percentage points lower than its last estimate in May, although its 2025 projection has improved from its previous prediction of zero growth."}],[{"start":null,"text":"