The conservatives and Social Democrats (SPD), currently negotiating to form a centrist coalition after last month’s election, propose establishing a 500-billion-euro ($546.05 billion) fund to invest in infrastructure and amending constitutional borrowing restrictions to enable increased security spending.
If enacted, these measures would represent a major shift from Germany’s long-standing fiscal conservatism, influencing euro zone bond yields and strengthening the euro over the past week.
Leaders of the conservatives, SPD, and Greens expressed confidence on Monday that they could secure the necessary votes to amend the Constitution for this financial overhaul.
“I am confident we will obtain a two-thirds majority,” stated Friedrich Merz, head of the conservative Christian Democrats, who, along with their Bavarian sister party, secured victory in the election. According to Merz, only a small number of conservative lawmakers oppose the proposal, making him the likely next chancellor.
SPD and Greens representatives also anticipated minimal resistance from their members.
Collectively, the three parties could afford to lose around 30 votes and still push the legislation through.
A debate is scheduled for the morning, with a vote expected around midday.
If the Bundestag lower house approves the bill, it must then clear the Bundesrat upper house, which represents Germany’s 16 federal states. A significant barrier was lifted on Monday when the Bavarian Free Voters agreed to support the legislation.
The conservatives and SPD aim to pass the law in the current parliamentary session to prevent potential obstruction from a larger number of far-right and far-left members in the new Bundestag beginning on March 25.
Merz justified the fast-track approach by citing recent changes in U.S. policy under President Donald Trump, warning that an unpredictable U.S. and a confrontational Russia could leave Europe vulnerable.
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