The CDU/CSU bloc and the SPD have reached an agreement with the Greens on a massive increase in government borrowing.
The conservative CDU/CSU bloc of German election winner Friedrich Merz and the Social Democrats (SPD) have agreed in principle with the Greens on plans for a massive increase in state borrowing ahead of a parliamentary vote next week.
The debt reform plan, put forward jointly by the conservatives and the SPD, would exempt defense spending from the country’s constitutionally enshrined debt brake and create a special €500 billion ($545 billion) fund for infrastructure investment.
The compromise includes the allocation of €100 billion for the climate and economic transformation fund.
Support from the Greens means Merz should get the two-thirds parliamentary majority the planned constitutional amendments require in a vote scheduled for next week.
Merz, whose conservative bloc is in negotiations with the SPD to form a new government following last month’s elections, wants to secure the funds before a new parliament convenes on March 25 — at which point the CDU/CSU tie up wtih the SPD and Greens would no longer have the majority necessary to pass the measure.
What did German politicians say?
“Germany is back,” said Merz, announcing the agreement on debt reform.
“It is a clear message to our partners and friends, but also to our opponents, to the enemies of our freedom: we are capable of defending ourselves and we are now fully prepared to defend ourselves,” he said.
Merz also said he expects the country to release €3 billion ($3.27 billion) in military aid to Ukraine once the upper house passes the debt reform.
“There will be no shortage of financial resources to defend freedom and peace on our continent,” Merz stressed. “Germany is making its major contribution to the defense of freedom and peace in Europe.”
Meanwhile, Social Democrat co-leader Lars Klingbeil said a major government borrowing and investment push was a “powerful boost” for Europe’s largest economy.
“We have laid the foundation for Germany to get back on its feet and protect itself,” Klingbeil said after his SPD agreed with conservatives and Greens on the historic debt package.
Green parliamentary group leader Katharina Dröge said the €100 billion, which must be spent on new measures rather than to fill budgetary holes, “will make a difference” as the money would be “channelled in the right direction.” Though the Green will not be part of the next government, she said negotiations to reach Friday’s compromise would allow ministers in the future government to “do the right thing.”
Source: https://www.dw.com/en/germany-parties-agree-on-historic-debt-deal/a-71922888