Friedrich Merz, the likely next chancellor of Germany, announced on Tuesday, March 4, that his center-right CDU/CSU party, along with the center-left Social Democrats (SPD), plans to propose substantial increases in defense and economic spending amounting to hundreds of billions.
During a press conference, Merz stated that the two parties would present proposals to parliament within the week for a “special fund of €500 billion over the next decade” aimed at economic development. Additionally, they intend to seek exemptions for increased defense spending from the constraints of Germany’s constitutionally mandated “debt brake.”
This initiative would allow for unlimited borrowing for defense purposes beyond an amount equivalent to one percent of GDP, which translates to approximately €45 billion based on Germany’s current economic size.
The CDU/CSU emerged as the leading party in last month’s general elections and has swiftly engaged in coalition negotiations with the SPD. These discussions have gained urgency due to tensions between the Trump administration and Ukrainian President Volodymyr Zelensky, alongside the suspension of U.S. military aid to Ukraine.
Read more: Overview of US military aid to Ukraine as Trump halts deliveries
Merz also expressed his intention to secure immediate approval for a €3 billion aid package for Ukraine, which has faced delays for several weeks. He mentioned that he would meet with outgoing Chancellor Olaf Scholz on Wednesday to discuss the urgent assistance required for Ukraine, estimated at around €3.0 to €3.5 billion, which could be approved as off-budget expenditure.
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