Germany Scholz goes to Brussels with a huge financial package
Following the agreement on a historic financial package, the negotiators from the CDU/CSU and SPD want to meet Chancellor Olaf Scholz today.
05.03.2025, 06:02
SDA
An exchange is planned with a view to the EU summit in Brussels on Thursday. EU Commission President Ursula von der Leyen has presented a plan to massively increase defense spending in Europe - almost 800 billion euros are at stake. Scholz is now traveling to the summit with the promise that Germany can do its part.
This is because the CDU/CSU and SPD have agreed to reform the debt brake in the Basic Law in order to increase defense spending. In future, loans for all defense spending above one percent of gross domestic product are to be exempt from the rule - calculated on the basis of GDP for 2024, this would be all spending above the mark of around 43 billion euros.
Clear approach to SPD and Greens
The decision comes as a surprise, as the likely future chancellor Friedrich Merz (CDU) said just a week ago: "It is out of the question that we will reform the debt brake in the near future." The fact that this is now happening after all can be seen as a clear approach to the possible coalition partners SPD and the Greens. Both had made it clear that they reject the alternative solution - a higher Bundeswehr special fund.
The reform is to be passed by the old Bundestag so that it cannot be blocked by the AfD and the Left in the future parliamentary composition after the new elections. The CDU/CSU and SPD are likely to rely on the votes of the Greens in the vote. This is because they alone do not have a majority for the amendment to the Basic Law - and the FDP rejects any tightening of the debt brake. FDP parliamentary group leader Christian Dürr described the exploratory parties' plan as irresponsible in the evening.
Scholz has something to show in Brussels
For Chancellor Scholz, the exploratory decision means that he will not have to travel to Brussels empty-handed on Thursday. Following the suspension of US arms deliveries to Ukraine, many eyes are now on Germany as the second largest military supporter after the USA. In contrast, the German government no longer played a leading role in Europe in the diplomatic efforts to find a peace solution in Ukraine. The initiative for a peace plan in response to the scandal between US President Donald Trump and Ukrainian President Volodymyr Zelensky came from the UK and France.
Against this backdrop in particular, it is important from a German perspective to show the ability to act in the current phase of transition between two governments. In addition to Scholz and Merz, SPD leaders Lars Klingbeil and Saskia Esken as well as CSU State Group leader Alexander Dobrindt will take part in the meeting at the Chancellery.
Preparing for escalation in the USA
According to participants in the exploratory talks, the one percent rule for defense spending is also intended to prepare for possible decisions by US President Trump. In future, defense spending could be scaled up as desired because it would be above the one percent GDP outside of the debt brake. In addition, the willingness of a future federal government to spend on defense would be unpredictable for Russia - unlike with a special fund, as there is always an upper limit.
Special fund for infrastructure
Parallel to the change to the debt brake, a special fund with a credit-financed 500 billion euros is also to be created for infrastructure, i.e. for the renovation of roads, railways, bridges, energy networks and more. The SPD had also called for this.
The FDP is now accusing the CDU/CSU of breaking key election campaign promises. A coalition is emerging here "that is building its common ground on endless debt", said parliamentary group leader Dürr.
The Greens want to take a look at the package first, as parliamentary group leader Britta Hasselmann announced. A majority in the Bundestag is therefore by no means certain.
"Economist" voices criticism
Economic expert Veronika Grimm fears that the next federal government will now feel significantly less pressure to reform because more money is available. She told the German Press Agency that it was an "extremely risky bet" to keep postponing the need for reform through debt.
Other economists, however, praised the proposals of the CDU/CSU and SPD. "The package is a real game changer," wrote economist Jens Südekum on X. The President of the Kiel Institute for the World Economy, Moritz Schularick, wrote on X that the plans were an "extremely important step for security in Germany and Europe".
The plans are also well received by trade unions and local authorities. According to Christiane Benner, First Chairwoman of the IG Metall trade union, politicians seem to have understood that action must now be taken quickly and boldly. André Berghegger, Chief Executive of the German Association of Towns and Municipalities, told the Funke media group newspapers that an investment offensive was overdue. In the municipalities alone, the investment backlog amounted to around 186 billion euros.
Negotiators see successful exploratory talks as a good basis
The CDU/CSU and SPD saw the rapid agreement as a good sign for further negotiations. CSU state group leader Dobrindt said on ZDF's "heute journal" that the exploratory talks so far had shown that the CDU/CSU and SPD could work together in a spirit of trust. The CDU/CSU is counting on the possibility of reaching coalition negotiations next week and then forming a coalition as soon as possible.
Defense Minister Boris Pistorius, who is part of the SPD exploratory team, said on ARD's "Tagesthemen" that they were not yet in coalition negotiations. "But it shows what is possible if both sides (...) recognize the seriousness of the situation and behave very responsibly."
