Friedrich Merz, who is expected to become Germany’s next chancellor, has announced a political deal to raise hundreds of billions of euros in extra spending on defence and infrastructure, BBC reports.
“In view of the threats to our freedom and peace on our continent, the rule for our defence now has to be whatever it takes,” he said.
Merz, whose conservatives won German elections last month, said he and his likely centre-left coalition partners would present new proposals to parliament next week. He spoke of the urgent need to increase German spending in light of “recent decisions by the US government.”
Merz, 69, did not elaborate, but he openly criticised President Donald Trump’s treatment of Volodymyr Zelensky in the Oval Office.
Earlier this week, he said European leaders need to show that “we are able to act independently in Europe.”
At a press conference on Tuesday, Merz, along with leaders of the Social Democrats and Bavaria’s conservative sister party, said Germany expects the US to stick to “mutual alliance commitments … but we also know that resources for our national and allied defence must be significantly increased.”
Merz said in English that he would do “whatever it takes” to defend freedom and peace – a reference to Mario Draghi’s vow to save the euro in 2012 when he was president of the European Central Bank.
At the heart of his proposals is a €500 billion (£415 billion) special fund to repair Germany’s crumbling infrastructure, as well as loosening tough budget rules to allow investment in defence.
Germany imposed a “debt brake” or Schuldenbremse after Europe’s financial crisis, capping the budget deficit at 0.35 per cent of national economic output (GDP) in normal times.
The new defence proposal recommends that “necessary defence spending” of more than 1% of GDP should be exempted from the “debt brake” restrictions, with no upper limit set. Although Germany has given more aid to Ukraine than any other European country, its armed forces are notoriously underfunded.
Meeting with Scholz
The government of Social Democrat Olaf Scholz created a €100bn fund after the military conflict in Ukraine in 2022, but most of that money has already been disbursed. Germany will have to find an extra €30 billion a year just to meet NATO’s current target of 2% of GDP for defence, a figure security experts say should be raised to 3%.
Scholz was due to meet Friedrich Merz and Social Democrat leaders on Wednesday, ahead of an EU summit on Ukraine and European defence. His government collapsed late last year because the three parties in the coalition could not agree on reforming debt limits.
Debt restrictions are spelled out in Germany’s constitution, or Basic Law, and changing them would require a two-thirds majority in parliament, which is not a foregone conclusion because of the large number of seats held by the AfD and the Left Party.
However, the new parliament will not convene until the end of March, and the measure will initially be considered by the old composition.
Boris Pistorius, the Social Democrats’ defence minister in the outgoing government, said the spending plans were a “big and important step” even if they were far from a coalition deal. Ten days after the German election, the parties are taking part in preliminary talks that will continue on Thursday.
Pistorius told German television that excluding defence from the state debt rules was not so much about arms as about “the security of our country – nothing more and nothing less.”
Social Democrat leader Lars Klingbeil, who spoke alongside Merz on Tuesday, detailed the plan to reinvest in German infrastructure, saying: “Our country is wearing itself out.”
Loans totalling €500bn would go into a fund to repair roads, railways and other critical infrastructure; €100bn of the money would go to Germany’s 16 federal states, while loosening the debt brake so that the states could also rake in small sums.
