The two parties likely to form Germany’s next government have agreed to borrow hundreds of billions of euros to boost defence and infrastructure. Their plan involves bypassing the incoming Bundestag by pushing through the deal before the new parliament takes shape.
The ambitious plan of investing up to €1 trillion in the country’s defence capabilities over the next decade—half of it directly in the armed forces and the other half in wider defence infrastructural development—hinges on the incoming CDU-SPD grand coalition’s ability to convince the Greens to support a constitutional change that would enable them to circumvent budget deficit rules and rack up national debt.
Such a change needs the approval of a two-thirds majority, which the CDU, SPD, and Greens won’t have once the Bundestag is reorganized based on the election results. In other words, AfD and Die Linke could block the initiative unless the establishment parties adopt it before the new parliament convenes on March 25th.
Parties on the right and left wing of the Bundestag have called the proposal “shameless” and have vowed to challenge the legislation in court. However, CDU leader and likely next chancellor Friedrich Merz said on Tuesday, March 4th, that the move was necessary “in view of the threats to our freedom and peace on our continent.”
„Deutschland und Europa müssen schnell ihre Verteidigungsfähigkeit stärken. @CDU, @CSU und @SPD werden einen Antrag zur Grundgesetzänderung einbringen, damit Verteidigungsausgaben über 1 % des BIP von der Schuldenbremse ausgenommen werden. Angesichts der Bedrohungen unserer… pic.twitter.com/nWYHi7srC2
— Friedrich Merz (@_FriedrichMerz) March 4, 2025
U.S. President Donald Trump’s iron fist pushing Europe to take responsibility for their own defence left many Western European leaders, including Merz, afraid that the United States will abandon its European NATO allies in the face of Russian aggression.
In contradiction with his election campaign promises, Merz wants to reform the so-called “debt brake,” easing controls on the constitutionally enshrined state borrowing limits to free up investment.
In 2009, Berlin enshrined the debt brake in its constitution, which restricts government borrowing and sets the structural deficit at a maximum of 0.35% of GDP.
The new proposal would see defence spending exempted from the debt brake when it exceeds 1% of GDP. In addition to funds allocated to modernize Germany’s military, Merz also wants to bring in a special fund of €500 billion for the next ten years for industrial and infrastructure investments, totaling as much as €1 trillion over the next decade.
As we reported yesterday, the centre-right alliance and the SPD want to put forward their proposals next week. The timing is of utmost importance to them because a two-thirds majority is required for the legislation to pass and to amend the constitution—but the two parties, together with the Greens, only have such a majority in the outgoing parliament, which convenes at the end of March.
The right-wing Alternative für Deutschland (AfD), which came second in the elections, and the far-left Die Linke both oppose further military spending, and together they have more than a third of the seats in the new parliament, but not enough MPs in the old one to block Merz’s proposals.
Die Linke have said they will challenge the legislation in the constitutional court if Germany takes on new debt to fund defence expenditure. Party’s co-chairman Jan van Aken said:
How absurd is this? A week ago, 50 million people went to the polls, elected a new Bundestag, and then they [CDU/CSU and SPD] come along and say that the majorities don’t suit us, and we will quickly use the old Bundestag to make a decision. I don’t think that’s very democratic.
AfD parliamentary group leaders Tino Chrupalla and Alice Weidel said they would “ensure that any decision taken serves the interests of the German citizens and is made in accordance with the constitution.” Weidel lambasted Merz for wanting to take on “almost 1 trillion euros of new debt at the expense of the taxpayers.” She stated:
Merz lied to the voters in the election campaign. The AfD would cut back on expenses and carry out spendings that are in the interest of our country and our citizens.
Fast 1 Billion Euro neue Schulden zu Lasten der Steuerzahler, die er dann auch noch "Vermögen" nennt: Merz hat die Wähler mit jedem Wort im Wahlkampf belogen. Die AfD würde den Rotstift ansetzen – und Ausgaben nur noch im Interesse unseres Landes und unserer Bürger tätigen. pic.twitter.com/1xYLCBYk9d
— Alice Weidel (@Alice_Weidel) March 4, 2025
The hawkish Greens, who are staunch supporters of Ukraine and of more funding for infrastructure, have not yet agreed to the new proposals but said they will examine them. The party’s parliamentary group leader Katharina Dröge hinted that they are willing to compromise as long as climate protection gets significant funding under the new government.
The debt brake reform has mostly been espoused by the SPD and the Greens, while the CDU/CSU and the liberal FDP party have been known to be fiscally conservative. The decision to circumvent the debt brake and borrow heavily once again highlights how the centre-right is hoping to appease the Left in order to gain power.
“Friedrich Merz is using the opportunity to buy his way to power,” conservative media outlet Apollo News said, criticising the CDU leader for conceding to the Left, breaking his campaign promise of maintaining the debt brake, and putting “an enormous additional burden” on the taxpayers.