‘Germany is back’: Parties agree on massive €500b spending plan

Germany’s likely next chancellor, Friedrich Merz, on Friday hailed a cross-party agreement on a landmark infrastructure and defence package amounting to €500 billion ($545 billion).

The agreement between his conservative bloc, the Social Democrats (SPD), and the Greens sends a clear message to friends and foes around the world that in future there will be no shortage of financial resources to defend freedom and peace, Merz said in Berlin.

“Germany is back,” he said.

The package has been highly controversial, not only for its size but also for the fact that it includes a relaxation of Germany’s constitutional limits on debt.

Furthermore, Merz intends to push the vote through in the coming week, before the first session of the new lower house of parliament. National elections in February changed the balance of power in the Bundestag, but the new lawmakers will only take their seats on March 25.

In the new parliament, Merz would not have an obvious way to gather enough votes to push the package through.

He is therefore using the strength of the SPD, conservatives and Greens in the outgoing parliament to push through the constitutional changes, which require a two-thirds majority.

A vote on the package is set for Tuesday in the lower house. A two-thirds majority is also required in the upper house for the changes to be approved.

The co-leader of the SPD, Lars Klingbeil said the package was a “powerful boost for Germany.”

“It has the potential to move our country forward for the next few years, perhaps decades,” said Klingbeil, according to a statement from the SPD parliamentary group.

Greens end opposition to bill

The Greens ended their opposition to the bill on Friday with the promise of €100 billion ($109 billion) earmarked to help fight climate change, dpa learned on Friday from the parties involved in the negotiations.

Some of the money will be used to make the economy more climate friendly, the sources said.

Green parliamentary group leader Katharina Dröge said that the “€100 billion will make a difference.”

The money would be “channelled in the right direction,” she said, and would allow ministers in a future government to “do the right thing.”

Other parties have put up legal objections to the bill, however.

The far-right Alternative for Germany (AfD) and The Left have launched urgent complaints against the rapid scheduling of the vote with the country’s Constitutional Court.

The court is due to deliver its verdict before the vote scheduled for Tuesday.

Merz confident of majority

Following the dramatic developments on Friday, Merz said he firmly believes that there will be the necessary majority in the Bundestag to amend the constitution.

“I assume that we will easily achieve the two-thirds majority,” the possible future chancellor said after the consultations in Berlin.

Together, the conservative bloc comprising Merz’s Christian Democrats (CDU) and their Bavarian sister party, the Christian Social Union (CSU), in addition to the SPD and the Greens should have 31 more votes than required for a two-thirds majority.

“So we also have a bit of a buffer – if you like – in case of illness,” Merz said.

Easing the debt limit

The so-called “debt brake” will be relaxed by the new legislation, and not only for defence spending.

After pressure from the Greens, the borrowing limits will also be relaxed for spending on cybersecurity and civil defence as well as intelligence services and support for states attacked in violation of international law.

All expenditure that exceeds 1% of gross domestic product can be financed from loans, according to the plans – with no upper limit.

Source: dpa

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