Germany German Bundestag gives green light for financial package
The Bundestag in Germany has given the green light for a historic loan package of hundreds of billions of euros for defense, infrastructure and climate protection.
18.03.2025, 16:21
SDA
The MPs approved the necessary amendments to the Basic Law with a two-thirds majority. It was not close, there was a buffer of more than 20 votes. Before the debt plans can become reality, however, the Bundesrat (upper house of parliament) still has to give its approval on Friday.
What exactly is planned
Germany has a huge investment backlog in defense and infrastructure. Now the debt brake - which sets strict limits on new government borrowing - is to be relaxed for spending on defense, civil protection, intelligence services and cyber security. Loans may be taken out for all expenditure in these areas that exceeds one percent of gross domestic product - according to the politicians' calculations, 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 is to be used to pay for the repair of dilapidated infrastructure - i.e. bridges, energy networks, roads and schools. 100 billion euros are to flow into climate protection and the climate-friendly restructuring of the economy. However, the money may only flow if an appropriate investment quota applies in the normal core budget - the Greens want to prevent the money from being used to finance election gifts in a roundabout way.
How the Bundestag debated it
The old Bundestag had been convened once again for the resolution because the majority situation in the next Bundestag would have made a yes vote difficult. The CDU/CSU and SPD had also campaigned for a long time for the consent of the Greens and made some concessions to them.
Green parliamentary group leader Britta Hasselmann nonetheless settled accounts with the presumed next chancellor Friedrich Merz. He, too, had already known last year that Germany urgently needed investment and more money for defense. However, the CDU/CSU had never publicly admitted this and had even defamed the Greens for making such demands. "But I am nevertheless pleased that we are making this decision today, because it is necessary for our country," said Hasselmann.
Merz defended his plans with reference to the security of Germany, Europe and NATO. SPD parliamentary group leader Lars Klingbeil advertised the benefits of the planned investments for citizens. "This package will relieve the majority of people in their everyday lives," he said. Defence Minister Boris Pistorius (SPD) warned: "Our security must not be jeopardized by budgetary constraints."
Harsh accusations came from the AfD, the FDP, the BSW and the Left. FDP parliamentary group leader Christian Dürr accused the CDU/CSU of deciding against the economic success of the country. AfD parliamentary group leader Tino Chrupalla declared that Merz not only had no backbone, he was now "completely spineless".
Left-wing politician Sören Pellmann spoke of "smokescreens of fear and anxiety" and unrealistic doomsday scenarios with regard to the planned rearmament. BSW chairwoman Sahra Wagenknecht said: "War loans with a climate label, you have to come up with that first."
What the decision means for the coalition negotiations
The financial package is the basis for everything that the Christian Democrats and Social Democrats have agreed so far on the way to a possible black-red coalition. Without the billions in loans, they would probably have to discuss many things all over again.
But even with the compromise forced through by the Greens, it will not be easy. In particular, the stipulation that only additional projects may be financed from the special pot could cause difficulties for the negotiators. This is because they will now have to find money for many projects in the normal budget.
Can the package still fail?
A two-thirds majority is required not only in the Bundestag, but also in the Bundesrat (chamber of the federal states). However, this is likely to be the case after the CSU and Free Voters in Bavaria agreed on approval on Monday. The federal states will also benefit significantly from the package: not only will they receive 100 of the 500 billion euros for infrastructure and climate protection. In future, they will also be allowed to take on debt amounting to 0.35 percent of gross domestic product - previously, the states were subject to a debt limit of zero.
