BERLIN: Germany’s parliament approved plans for a massive spending surge Tuesday, throwing off decades of fiscal conservatism in hopes of reviving growth and scaling up military spending for a new era of European collective defence.
The approval in the Bundestag hands conservative leader Friedrich Merz a huge boost, giving the chancellor-in-waiting a windfall of hundreds of billions of euros to ramp up investment after two years of contraction in Europe’s largest economy. Germany and other European nations have been under pressure to shore up their defences in the face of hostile Russia and shifts in US policy under President Trump, which European leaders fear could leave the continent exposed.
Merz’s conservatives and Social Democrats (SPD), who are in talks to form a centrist coalition after last month’s election, want to create a 500 billion euro ($546 billion) fund for infrastructure and to ease constitutionally enshrined borrowing rules to allow higher spending on defence.
“We have for at least a decade felt a false sense of security,” Merz told lawmakers ahead of the vote. “The decision we are taking today on defence readiness … can be nothing less than the first major step towards a new European defence community,” he said. The legislation still has to go Friday to the Bundesrat upper house but the main hurdle to passage there appeared to fall Monday when the Bavarian Free Voters agreed to back the plans. Merz has justified the tight timetable with the rapidly changing geopolitical situation.
“It’s excellent news because it sends a very clear message, very clear message also to Europe that Germany is determined to invest massively in defence,” said EU Commission president Ursula von der Leyen. Speaking alongside her in Copenhagen, Danish PM Mette Frederiksen said: “As a neighbouring country it’s fantastic news because we need a strong Europe.”
REUTERS
