Germany has made a historic decision to boost defence and infrastructure funding. Lawmakers in the Bundestag approved the measure on Tuesday with a two-thirds majority, signaling a significant change in the nation’s security and fiscal policies. This move could reshape European security strategies at a crucial time.
The new law excludes defence and security spending from Germany’s strict debt regulations. It also establishes a massive €500 billion ($547 billion; £420 billion) infrastructure fund aimed at addressing urgent needs.
Germany has long been cautious about accumulating debt, especially after the global debt crisis of 2009. However, the ongoing conflict in Ukraine and evolving international relations have made this change essential. Lawmakers approved the measure by a wide margin of 513 to 207, well above the required threshold.
Final Approval Still Pending
Although the Bundestag has approved the measure, it still needs approval from the Bundesrat. Representatives from state governments will vote, and a two-thirds majority is required. The final decision is expected on Friday.
Friedrich Merz, who proposed these policies and is likely to become the next chancellor, addressed lawmakers during the debate. He said Germany had been under “a false sense of security” for the last decade.
“We are laying the foundation for a new European defence coalition,” Merz said. He added that this coalition would include countries outside the European Union.
Positive Reactions from EU Leaders
European Commission President Ursula von der Leyen welcomed the decision, calling it “excellent news.” At a press conference with Danish Prime Minister Mette Frederiksen, she said, “This move shows that Germany is committed to strengthening its defence.” Frederiksen called the decision “fantastic news for all Europeans.”
Broad Impact Beyond Defence
The measure also includes a comprehensive €500 billion investment plan for infrastructure. It will support essential projects such as bridge and road repairs, along with climate change initiatives. The Green Party pushed for the inclusion of environmental projects.
Merz, whose CDU party recently won the general election, emphasized the urgency of the decision. Speaking to a public broadcaster, he said, “The situation has worsened in recent weeks,” referring to the ongoing conflict in Ukraine and changing relations with the United States.
A Boost for Ukraine and Europe
The new defence package includes provisions to help countries attacked in violation of international law. This exemption from Germany’s debt cap will allow outgoing Chancellor Olaf Scholz to authorize €3 billion in aid to Ukraine as early as next week.
The decision gives Merz access to hundreds of billions of euros for state investments once he takes office. Some in Germany are calling this strategy a “fiscal bazooka.” The implications will be far-reaching, impacting not only Germany’s security but also European stability.
However, not everyone supports the move. Far-right and far-left parties, including AfD and Linke, strongly oppose the measures. Coalition talks are still ongoing, with Merz aiming to form a government by Easter.