Germany German Bundestag wrestles over the financial package
In an emotional debate, the Bundestag in Germany discussed the plans for the historic billion-euro financial package for defense and infrastructure.
18.03.2025, 12:56
SDA
CDU/CSU parliamentary group leader Friedrich Merz justified the planned billions in debt with the security of Germany, Europe and NATO. "It is a war against our country, too, which is taking place every day," said the presumed next German chancellor with a view to Russia. He announced austerity measures and a reduction in bureaucracy.
SPD parliamentary group leader Lars Klingbeil touted the benefits of the planned investments for citizens. "This package will relieve the majority of people in their everyday lives." He also insisted on reforms. Money alone could not solve the challenges facing the country, he said. Defence Minister Boris Pistorius (SPD) declared: "Our security must not be jeopardized by budgetary constraints."
AfD parliamentary group leader calls Merz "completely spineless"
Sharp criticism came from the FDP (liberals) and AfD (right-wing populists). FDP parliamentary group leader Christian Dürr, whose party will no longer be a member of the next Bundestag, accused the CDU/CSU of deciding against the country's economic success. "Lots of money, no reforms. That will characterize your chancellorship," Dürr said, addressing Merz.
AfD parliamentary group leader Tino Chrupalla accused Merz of not only having no backbone, but also of being "completely spineless". "The aim here is to haphazardly drive public debt sky high," he criticized.
The FDP and AfD failed in their attempt to prevent the meeting. The CDU, CSU, SPD and Greens rejected motions to remove several points of the planned amendment to the Basic Law (the constitution) from the agenda.
Hasselmann settles accounts with Merz
The Greens, who had negotiated the package with the CDU, CSU and SPD, want to agree to it with a few exceptions. However, parliamentary group leader Britta Hasselmann did not miss the opportunity to settle accounts with Merz. Everyone, including Merz, had already known last year that Germany urgently needed investment and at the same time more money for defense. However, he and his party 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.
What exactly is planned
There is a huge investment backlog in Germany when it comes to defense and infrastructure maintenance. The Christian Democrats and Social Democrats, who are currently negotiating a joint new federal government, are of the opinion that they cannot solve this without high levels of debt. They have therefore proposed a credit solution with several amendments to the Basic Law, for which they alone do not have the necessary majority.
After tough negotiations with the Greens, who are now also prepared to agree, the following was agreed: The debt brake - which sets tight limits on new government borrowing - is to be relaxed for spending on defense, civil defense, 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 there is an appropriate investment quota in the normal core budget - the Greens want to prevent the money from being used to finance election gifts in a roundabout way.
Can the package still fail?
Although the CDU/CSU, SPD and Greens have reached an agreement at top level, it is not certain that all MPs will actually vote in line with their parliamentary group. This applies in particular to MPs who will no longer be members of the next Bundestag because they did not stand for re-election or were not re-elected.
In all three parliamentary groups, one or more MPs have already declared that they will vote against the package or abstain. For a two-thirds majority, the three groups together only have a buffer of 31 votes.
A two-thirds majority is not only required 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.
