The conservative CDU/CSU bloc of German election winner Friedrich Merz and the Social Democrats (SPD) have agreed in principle with the Greens on plans for a massive increase in state borrowing ahead of a parliamentary vote next week.
The debt reform plan, put forward jointly by the conservatives and the SPD, would exempt defense spending from the country’s constitutionally enshrined debt brake and create a special €500 billion ($545 billion) fund for infrastructure investment.
The news was first reported by the Reuters news agency, citing a source close to the negotiations. One of the sources said the compromise includes the allocation of €100 billion for the climate and economic transformation fund.
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Merz wants outgoing Bundestag to pass debt reform The Greens had initially refused to back the plan, which needed their support to reach the two-thirds majority required for a constitutional amendment in the Bundestag, Germany’s lower house of parliament.
Merz’s goal is to secure the funds before the new Bundestag convenes on March 25, where they risk being blocked by an expanded contingent of far-right and far-left lawmakers.
The outgoing Bundestag could pass the package on Tuesday. It would then have to be approved by a two-thirds majority in the upper house, the Bundesrat.
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Edited by: Kieran Burke
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