Germany’s likely next leader Friedrich Merz was set yesterday to defend his unprecedented plans to massively ramp up defense and infrastructure spending in the Bundestag as lawmakers begin debating the proposals.
Merz unveiled the plans last week, vowing his center-right Christian Democratic Union (CDU)/Christian Social Union (CSU) bloc and the center-left Social Democratic Party (SPD) — in talks to form a coalition after last month’s elections — would quickly push them through before the end of the current legislature.
Fraying Europe-US ties under US President Donald Trump have fueled calls for Germany, long dependent on the US security umbrella, to quickly boost military funding, while infrastructure spending is seen as a route to pull Europe’s top economy out of stagnation.
Photo: AFP
Vowing to do “whatever it takes’ Merz has proposed exempting defense spending from the country’s strict debt rules when it exceeds 1 percent of GDP and setting up a 500 billion euro (US$544 billion) fund for infrastructure investments.
While the plans have won praise from German allies abroad, who grew weary of inaction during outgoing Chancellor Olaf Scholz’s tenure, Merz faces a desperate scramble to push them through the German Bundestag.
As the measures involve a change to the constitutionally enshrined “debt brake,” which limits government borrowing, they require a two-thirds majority in the Bundestag. This means that the CDU/CSU and SPD want to get them passed before a new parliament convenes later this month in which far-right and far-left parties, who have expressed skepticism about extra defense spending, would be in a position to block the measures.
Debates began in the Bundestag yesterday, with a vote on the proposals due on Tuesday, but Merz’s task got trickier after the Green Party, whose votes are needed to reach the two-thirds mark, threatened to torpedo the plans.
Although the Greens were in favor of a reform of the “debt brake,” the changes proposed by Merz were not the ones needed, Green Party leader in the Bundestag Katharina Droege told reporters on Monday.
Merz and his partners from the SPD were creating a “treasure chest” to fund their political priorities, including tax cuts, Droege said.
“Whoever wants our approval for more investment must also show that it is really about more investment in climate protection, more investment in the economy in this country,” she added.
The CDU has sought to appease the Greens, saying their concerns are “completely legitimate,” and the two sides have been holding talks this week. Merz’s plans also face another threat with the far-right Alternative for Germany (AfD) and the far-left Die Linke having filed legal challenges at the Bundesverfassungsgericht — Germany’s constitutional court — arguing there would be insufficient time for consultations.
The AfD won its best-ever showing at last month’s election, coming second with almost 21 percent of the vote, while Die Linke is set to enter the next parliament after a surprisingly good result of almost 9 percent of the vote.
If Merz fails to get his plans through, observers have said that he would lose momentum and his future government could face the same paralysis that beset Scholz’s ill-fated, three-party coalition, whose collapse in November last year precipitated last month’s vote.
The pressure has only increased on Merz in recent weeks as Trump has become increasingly hostile toward Ukraine and made overtures to Russia.
The incoming government would still have options to boost spending if the current parliament fails to pass the plans next week, analysts said.
Once Merz becomes chancellor — which could be in late next month — he could suspend the debt brake by invoking an emergency, as the previous government did during the COVID-19 pandemic, Berenberg bank economist Holger Schmieding said.
While it would only be a stopgap, “it would give a new German government time to temporarily raise defense and infrastructure spending while trying to garner a two-thirds majority for a permanent change to the debt brake,” he said.
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