German Bundesrat approves amendment to Basic Law for financial package

The law must now be checked and signed by Federal President Frank-Walter Steinmeier to ensure that it complies with the constitution.

The amendment to the Basic Law received 53 of the 69 votes in the Bundesrat. A total of 46 would have been required. Only the states of Brandenburg, Saxony-Anhalt, Thuringia and Rhineland-Palatinate abstained, all other states voted in favor. Abstentions have the same effect as a "no" in the Bundesrat because they are missing the necessary "yes" votes.

Debt brake in the Basic Law is relaxed

The law relaxes the debt brake enshrined in the Basic Law (German constitution), which sets strict limits on new federal borrowing, for expenditure on defense, civil protection, intelligence services and cyber security. In future, loans may be taken out for all such expenditure that exceeds one percent of gross domestic product. That would be around 44 billion euros this year.

In addition, a special fund will be created to which the debt brake does not apply and which will be fed with loans of up to 500 billion euros. This will be used to pay for the repair of Germany's ailing infrastructure. 100 billion euros are to go to the federal states, and a further 100 billion euros are to flow into climate protection and the climate-friendly restructuring of the economy.

Kretschmann: It's about Europe's self-assertion

In the Bundesrat, Baden-Württemberg's Minister President Winfried Kretschmann justified the softening of the debt brake enshrined in the Basic Law with the dramatically changing world situation. "It is about nothing less than Europe's self-assertion - in terms of security policy, economy and technology," said the Green politician. It is also about the self-assertion of our values of peace, freedom and democracy. "You cannot respond to such an extraordinary challenge with ordinary means."

Kretschmer: Structural reforms must be the second step

Saxony's Minister President Michael Kretschmer emphasized that Germany's problems could not be solved with money alone. The CDU politician called for structural reforms. "This second step must come." A new dynamic is needed. "We must remove the brakes on growth." Bremen's head of government Andreas Bovenschulte (SPD) called for the necessary implementing legislation to be passed quickly for the investments in infrastructure that are now possible. "What use is the best special fund if we can't manage it in practice?"

The billion-euro program that has now been approved is also crucial for the successful formation of a government in Germany. The CDU/CSU and SPD are currently negotiating the formation of a black-red coalition. CDU leader Friedrich Merz could then be elected as the new Federal Chancellor in April.