Germany’s designated new government has reached a historic agreement to significantly increase defense and infrastructure spending in response to concerns over waning US interest in Europe and the NATO alliance. The proposed plan, announced by Friedrich Merz, the likely next chancellor, aims to raise hundreds of billions of euros to bolster Germany’s military capabilities and improve its infrastructure.
The announcement came during exploratory talks between Merz’s Christian Democrats (CDU), the Christian Social Union (CSU), and the Social Democrats (SPD). Merz, alongside CSU’s Markus Söder and SPD co-leaders Lars Klingbeil and Saskia Esken, outlined their plan following the CDU’s victory in Germany’s federal election.
Key elements of the plan include proposing a motion in parliament to amend the German constitution to relax restrictions on defense spending exceeding 1% of Germany’s GDP. This initiative would allow for expenditure above approximately €45 billion to be allocated for defense purposes. Additionally, the federal states will be permitted to take out loans equivalent to 0.35% of their economic output to further enhance infrastructure development.
With the goal of forming a coalition government with the SPD, Merz and his counterparts are prioritizing national security and infrastructure investment to strengthen Germany’s position within Europe and the international community. This significant push for increased defense and infrastructure spending marks a pivotal moment for Germany’s future direction under the new government.
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