Stay informed about free updates
Simply register German politics Myft Digest – delivered directly to your Inbox.
Friedrich Merz, a German Chancellor in waiting, agreed on an agreement with his probable coalition partner to put hundreds of billions in special funding for the country's military and infrastructure and to indicate the “change of sea” in the national conservative approach to lending.
In the announcement that came just after won the federal elections, Merz said that his Christian Democratic Union (CDU), his Bavarian sister party and the rival Social Democrats (SPD) will be together in parliament next week to release the debt brake in the country.
The provisions would liberate defense spending over 1 % of GDP from the rules of the debt brake, which would allow Germany to increase its armed forces by an unlimited amount at a time when Europe is facing a prospect for the loss of the US that supported its security since Donald Trump started his second presidential period.
Future coalition partners will present another constitutional change that will set up a fund of EUR 500 billion for infrastructure, which would take more than 10 years. They are also planning to release debt rules for states.
“I want to say that very clearly with regard to the threats for our freedom and peace on our continent, our defense must now apply.” [the stance of]”Whatever it is,” Merz said, and on Tuesday he stood next to the leaders of the SPD and the Bavarian Christian Social Union at a press conference in Berlin.
He added: “Further defense spending can only be balanced if our economy returns to stable growth in a very short period of time. . . This requires quick and sustainable investment in our infrastructure. ”
Accounts need to go through a two-thirds mostly in parliament, which means that Merz will have to rework the departing Bunstag, which was elected in 2021-A to ensure the support of the Greens.
The plan means a stunning shift in German traditionally conservative approach to a public borrowing. In 2009, Berlin anchored the debt brake in its constitution, which limits government loans and maintains a structural deficit to 0.35 % of GDP.
Economists and defense specialists welcomed the decisive step.
“This is a fiscal change of the sea for Germany,” said Holger Schmieding, the chief economist in Berenberg. “Merz and his coalition to be on this occasion.”
Jan Puglierin, head of policy at the European Council for Foreign Relations, said Merz “acknowledged how extraordinary the situation”.
She added: “He accelerated the pace, showed sufficient flexibility to allow the SPD to board and lay the foundations of a coalition capable of acting.”
Jens Südekum, a professor of the international economy at the University of Düsseldorf University Heinrich Heine, who urged Merz to reform the debt brake, described this announcement as “overall game converter”.
Merz, whose conservative CDU/CSU led the campaign to attitude against reforms of contradictory brake reforms in summons to elections on February 23, accelerated coalition interviews with the SPD since Trump publicly admonished Ukraine President Volodymyr Zelskyyy Last week in the White House.
The preliminary agreement is preparing a way for a wider coalition agreement with the SPD. Another Chancellor of Germany wants to use the supermajority of the outgoing parliament to hand over constitutional changes because his government would probably be blocked in the next parliament Alternative for Germany and far left to die Linke.
The current parliament can be convened until March 25, before the new MPs can sit.
The agreement with the SPD came when the European Commission outlined a common debt tool on Tuesday that would allow Member States to finance the purchase of military equipment.
