Friedrich Merz, who's expected to become Germany's next chancellor, has announced a political deal to raise hundreds of billions of euros in extra spending on defence and infrastructure.

"In view of the threats to our freedom and peace on our continent, the rule for our defence now has to be 'whatever it takes'," he said.

Merz, whose conservatives won Germany's election last month, said he and his likely coalition partners from the centre left would put new proposals to parliament next week.

He has spoken of a need for urgency on German spending in light of "recent decisions by the American government".

Merz, 69, did not elaborate but he has been outspoken in his criticism of President Donald Trump's treatment of Ukraine's Volodymyr Zelensky in the Oval Office.

Earlier this week he said European leaders had to show "we are in a position to act independently in Europe".

At a news conference on Tuesday, alongside leaders from the Social Democrats and his conservative sister party in Bavaria, Merz said Germany was counting on the US to stand by "mutual alliance commitments... but we also know that the resources for our national and alliance defence must now be significantly expanded".

Merz said, in English, he would do "whatever it takes" to protect freedom and peace - a reference to Mario Draghi's vow to save the euro in 2012 when he was European Central Bank president.

At the heart of his proposals is a special €500bn (£415bn) fund to repair Germany's creaking infrastructure, as well as loosening stringent budget rules to allow investment in defence.

In the wake of Europe's financial crisis, Germany imposed a "debt brake" or Schuldenbremse, limiting the budget deficit to 0.35% of national economic output (GDP) in normal times.

The new defence proposal recommends that "necessary defence spending" above 1% of GDP should be exempt from debt brake restrictions, with no upper limit.

Although Germany has provided more aid to Ukraine than any other European country, its military is notoriously underfunded.

Olaf Scholz's Social Democrat-led government set up a €100bn fund after Russia's full-scale invasion of Ukraine in 2022, but most of that has already been allocated.

Germany will have to find an extra €30bn a year just to meet the current Nato target of 2% of GDP on defence, and security experts believe it will need to raise its target closer to 3%.

Scholz was due to meet Friedrich Merz and Social Democrat leaders on Wednesday on the eve of an EU summit devoted to Ukraine and European defence. His government fell apart late last year because the three parties in coalition could not agree to reforming debt restrictions.

The debt brake has been written into Germany's constitution, or Basic Law, and any change would require a two-thirds majority in parliament, which is not a foregone conclusion because of the large number of seats held by the far-right AfD and the Left party.

However, the new parliament will not convene until late March and this measure will initially go before the old parliament.

Boris Pistorius, the Social Democrat defence minister in the outgoing government, said the spending plans were a "big, important step" even if they were far from being a coalition deal. Ten days after Germany's elections, the parties are taking part in exploratory talks, which continue on Thursday.

Pistorius told German TV that removing defence from national debt rules was not about armaments as much as "the security of our country - nothing more, nothing less".

Social Democrat leader Lars Klingbeil, standing alongside Merz on Tuesday, gave details of the plan to re-invest in German infrastructure, saying: "Our country is wearing itself out."

Loans of €500bn would go into a fund to cover repairs to roads, railways and other critical infrastructure; €100bn of the money would go to Germany's 16 federal states, with a loosening of the debt brake to allow the states to rack up small amounts of debt too.

Source:
courtesy of BBC NEWS

by Paul Kirby

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