Germany’s would-be chancellor has attempted to win the support of the Greens for his proposed fiscal rule changes, offering to expand the scope of defence spending and demanding to know: “What more do you want from us?”
The outgoing parliament is meeting to debate the creation of a €500bn (£420bn) fund for infrastructure investment and radical changes in Germany’s borrowing limits in order to boost defence spending.
Friedrich Merz, whose conservatives won last month’s election and who is on the verge of becoming the new leader, wants to seal the funding deal before the new parliament convenes in less than two weeks. An expanded group of far-right and far-left MPs could oppose it in the new Bundestag, a “blocking minority” Merz is keen to avoid.
Amid expectations that Germany will relax a key element of its strict fiscal rules known as the “debt brake”, its allies have responded favourably and markets have rallied. Economic forecasters have said a public spending boost is likely to help the country emerge from two years of economic doldrums.
But the deal is far from being realised, as Merz’s CDU/CSU alliance and his probable future coalition partner, the Social Democrats (SPD), need to secure the support of the Greens in order to muster the two-thirds majority required to change the constitution.
On Thursday, Merz offered to expand the scope of defence spending to include civil defence and intelligence spending, asking the Greens: “What more do you want from us in so short a time?”
He restated his belief in the urgency of the situation. “We have to do something to improve our defensive capabilities, and quickly,” he said. “The word deterrence must rapidly be given a credible military foundation.”
Before the debate on Thursday, the Greens had indicated that negotiations were at a stalemate, with senior figures citing “grave flaws” in the legislation, including the lack of prominence it gave to climate policies.
Merz has faced accusations he intends to use the new money to finance projects that will please the new government’s conservative voter base, and has been called on to provide guarantees, including commitments to much-needed widespread reforms.
The far-right Alternative für Deutschland and the far-left Die Linke have, meanwhile, lodged complaints with the constitutional court, which might deliver its ruling this week.
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Merz has argued that raising defence spending has become a matter of urgency because of Russia’s invasion of Ukraine, not just for Germany, but for the whole of Europe. With Donald Trump in the White House, he has argued, the continent must become more independent.
Economists have described Merz’s multibillion-euro package as everything from a “bazooka” to “an extremely risky bet”, while he has called it vital “in light of the threats to our freedom and peace on our continent”.
The second and third readings of the government’s plans will take place next Tuesday. In between now and then, Merz will continue to negotiate with the Greens, according to his party officials.
Reuters contributed to this report.
