Robert Besser
17 Mar 2025, 11:14 GMT+10
BERLIN, Germany: German Lawmakers are debating whether to loosen the country's strict borrowing rules to fund military expansion.
The country faces mounting pressure to boost defense spending, and tensions are growing over Europe's security and the future of U.S. support under President Donald Trump.
Conservative leader Friedrich Merz, who won last month's German election and is working to form a coalition with outgoing Chancellor Olaf Scholz's Social Democrats, has called for urgent action. Speaking in parliament this week, he urged lawmakers to exempt some defense expenditures from the country's rigid "debt brake," which restricts new borrowing to just 0.35 percent of annual GDP.
"We must do something now to increase our defense capability significantly, and we must do it quickly and with great unity in foreign and security policy," Merz told lawmakers.
The proposed plan includes a 500 billion euro (US$533 billion) fund, financed by borrowing, to invest in both defense and infrastructure over the next decade. Economists estimate that, if approved, the measure could unlock up to a trillion euros in new spending over the same period.
However, changes to the debt brake require a two-thirds majority in parliament, as enshrined in the constitution. Merz and Scholz's parties hope to push the measure through before the new parliament convenes on March 25.
Opposition parties, including the far-right Alternative for Germany (AfD), argue that the debate should be postponed until after the new parliament is seated to reflect voters' will better. AfD, which finished second in the election, is expected to hold more seats in the incoming parliament than in the current one.
AfD co-leader Alice Weidel accused Merz of reversing his stance on the debt brake. "No other candidate for the chancellorship has broken as many election promises in such a short time as you, Mr. Merz," she said. "You will go down in history as the gravedigger of the debt brake."
Merz's party had previously opposed modifying the borrowing limit, but he has since signaled a willingness to negotiate, citing the need for stronger defense spending amid growing uncertainty in Europe.
Green Party co-leader Katharina Droge also criticized Merz for rejecting earlier proposals to reform the debt brake for economic and climate-related investments.
Despite the pushback, Merz maintained that Germany must act swiftly to strengthen its military and fulfill its NATO commitments.
"Germany must become capable of defending itself, and Germany must return to the international stage as a capable partner in Europe, in NATO, and the world," he said.
The debate will continue in parliament on March 18, with the outcome likely to shape Germany's fiscal and defense policies for years to come.
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