BERLIN — In a bid to address Germany’s defense funding, the country’s anticipated next chancellor has made an appeal to lawmakers to relax the stringent rules concerning national debt. The proposal has become increasingly pressing amidst lingering doubts about the U.S.’s commitment to its European allies.
This request emerges against the backdrop of Germany’s longstanding fiscal constraints and the notable shift in U.S. defense strategy under President Donald Trump. Trump’s administration has called on Europe to strengthen its own security mechanisms, consequently challenging the post-World War II transatlantic bonds that have historically seen Europe rely on the U.S. for defense assurances.
Friedrich Merz, the conservative party leader who emerged triumphant in Germany’s recent election, is working towards forming a coalition with the outgoing Chancellor Olaf Scholz’s center-left Social Democrats. Both parties are in discussions to amend the country’s “debt brake,” a rule restricting new borrowing to only 0.35% of the GDP, in order to increase defense expenditures.
Addressing lawmakers, Merz stressed the urgency of enhancing Germany’s defense capabilities swiftly and aligning foreign and security policies firmly. This comes amid plans to create a substantial 500 billion euro ($533 billion) investment fund through borrowing, aimed at revamping Germany’s dilapidated infrastructure over the next decade, thereby revitalizing economic growth.
Economic analysts predict that this initiative could lead to up to a trillion euros in borrowing and spending over a ten-year span. However, implementing these changes requires a two-thirds majority in parliament, as the “debt brake” is enshrined in the German constitution. Merz and Scholz are attempting to pass the measures through the outgoing parliament, which holds a more manageable number of supporters, compared to the newly elected parliament.
The parliamentary discussion on this matter is set to continue on Tuesday. Critics of amending the “debt brake” for defense spending, including the far-right Alternative for Germany (AfD) party, argue that such a debate should occur after the new parliament convenes on March 25, better reflecting the electoral outcome.
The AfD, having secured the second position in the elections, is poised to have a stronger presence in the new parliament. The party’s co-leader Alice Weidel accused Merz of inconsistency on the issue, highlighting his past opposition to altering the debt rules. Weidel pointedly remarked that Merz has broken numerous electoral commitments in a brief period, branding him as a potential destroyer of the “debt brake.”
Concurrently, Katharina Dröge, co-leader of the Greens parliamentary group, criticized Merz for his past dismissals of the Greens’ proposals to modify the “debt brake” for economic and climate change investments. However, Merz and his allies emphasized the existential security threats in Europe, proposing that some of the proposed infrastructure funds be allocated for climate protection initiatives.
Advocating for a more flexible fiscal policy, Merz asserted that loosening the debt restrictions would enable Germany to bolster its defense capabilities amidst continental uncertainties. “Germany must become capable of defending itself and Germany must return to the international stage as a capable partner in Europe, in NATO and in the world,” Merz addressed the parliament, underlining the significance of Germany’s role in international security.
