As U.S. President Donald Trump distances the United States from its support for Ukraine, Germany’s leaders are scrambling to secure billions of euros for defense. The urgency is now building as Germany seeks to navigate potential political gridlock, with an upcoming vote in the Bundestag presenting a potential lifeline.
Merz Urges Immediate Military Spending Amid Shifting Global Alliances
Germany’s Christian Democratic Union (CDU) leader Friedrich Merz is spearheading the push for increased defense spending. He expressed growing concerns that Europe can no longer rely on the United States for security, particularly following Trump’s decision to distance himself from Ukraine. Merz stated that Germany must demonstrate its independence and ability to act decisively in the face of rising global tensions.
“The global security environment is shifting. It is time for Germany to step up,” Merz remarked. However, finding the necessary funds has proven to be a major hurdle. Earlier, Merz suggested that the funds could be sourced from the existing budget, but with the rising pressures, this approach is no longer seen as feasible.
The issue has become central to coalition talks between Merz’s CDU/CSU and the Social Democratic Party (SPD), with both parties urgently seeking a funding solution to address defense needs. One key proposal is reforming Germany’s debt brake, a constitutional limit on government borrowing set at 0.35% of GDP per year. While the SPD and the Green Party have long advocated for loosening this restriction, the CDU was initially hesitant. However, recent developments, including the strained meeting between U.S. President Trump and Ukrainian President Volodymyr Zelensky, have forced even conservative leaders to reconsider their position.
Debt Brake Reform Faces Challenges
Although reforms to the debt brake remain on the table, Merz has suggested delaying any changes until after the new Bundestag session begins on March 25. Reforming the debt brake requires a two-thirds majority in parliament, which will be difficult to achieve with the new political balance. The rise of parties like the Alternative for Germany (AfD) and the Left Party means any changes to the debt brake could face significant opposition, complicating efforts to secure funding for military spending.
Special Defense Fund: A Likely Solution
With a potential roadblock in reforming Germany’s debt rules, a more feasible option appears to be the creation of a new special defense fund. Following Russia’s invasion of Ukraine, the previous German government approved a €100 billion military fund with the backing of the CDU. A similar fund could be established to address the growing defense needs, but like the debt brake reform, it would also require a two-thirds majority to pass.
In contrast to the debt brake reform, this special defense fund is seen as politically more feasible, as it focuses specifically on military spending without altering Germany’s broader fiscal policy.
Economists Call for Large-Scale Investments
A group of leading economists, including Clemens Fuest, Michael Hüther, Moritz Schularick, and Jens Südekum, have proposed the creation of two special funds. One fund would allocate roughly €400 billion to bolster Germany’s defense capabilities, sending a clear signal to Russia. The other, estimated to be between €400 to €500 billion, would address Germany’s long-standing infrastructure deficits by modernizing roads, railways, and schools.
Securing parliamentary approval for these ambitious plans, however, will not be easy. While the Left Party supports increased investment in infrastructure, it strongly opposes any increases in military spending. The AfD has rejected additional debt spending altogether, calling for a return to the “peace course” proposed by the new U.S. administration, which focuses on diplomacy rather than military escalation.
Fast-Tracking the Legislation
To avoid potential gridlock, CDU and SPD leaders are considering a fast-track approach by calling a special session of the outgoing Bundestag. A vote could take place as early as next week, allowing Germany to secure the necessary funding before the new parliament convenes. On Wednesday, coalition leaders are set to meet with outgoing Chancellor Olaf Scholz to finalize the strategy ahead of his departure for the EU summit in Brussels on Thursday.
As the global security landscape continues to evolve, Germany is facing mounting pressure to secure its defense and infrastructure funding. The outcome of these crucial negotiations will have significant implications for the country’s future military capabilities and its ability to address its domestic needs.
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