Germany's election-winning conservative CDU/CSU bloc, led by Friedrich Merz, and the Social Democrats (SPD) have reached an agreement in principle with the Greens on a significant increase in state borrowing ahead of next week’s parliamentary vote.
The debt reform plan, proposed by the conservatives and the SPD, aims to exempt defense spending from Germany's constitutional debt brake and establish a €500 billion ($545 billion) fund for infrastructure investment.
The compromise also allocates €100 billion to the climate and economic transformation fund.
With backing from the Greens, Merz is expected to secure the two-thirds parliamentary majority needed for the constitutional amendments in next week’s vote.
"Germany is back," said Merz, announcing the agreement on debt reform.
"It is a clear message to our partners and friends, but also to our opponents, to the enemies of our freedom: we are capable of defending ourselves and we are now fully prepared to defend ourselves," he said.
Merz also said he expects the country to release €3 billion ($3.27 billion) in military aid to Ukraine once the upper house passes the debt reform.
"There will be no shortage of financial resources to defend freedom and peace on our continent," Merz stressed. "Germany is making its major contribution to the defense of freedom and peace in Europe."
Merz, whose conservative bloc is negotiating with the SPD to form a new government after last month’s elections, aims to secure the funds before the new parliament convenes on March 25. After that date, the CDU/CSU’s alliance with the SPD and Greens would no longer hold the majority needed to pass the measure.
Social Democrat co-leader Lars Klingbeil said a major government borrowing and investment push was a "powerful boost" for Europe's largest economy.
"We have laid the foundation for Germany to get back on its feet and protect itself," Klingbeil said after his SPD agreed with conservatives and Greens on the historic debt package.
Green parliamentary group leader Katharina Dröge said the €100 billion, which must be spent on new measures rather than to fill budgetary holes, "will make a difference" as the money would be "channelled in the right direction." Though the Green will not be part of the next government, she said negotiations to reach Friday's compromise would allow ministers in the future government to "do the right thing."
Russia intends to withdraw from its long-standing agreement on military-technical cooperation with Germany, the Russian Foreign Ministry announced, citing that relevant internal procedures are currently underway.
Germany’s producer prices dropped 1.2% year-on-year in May, in line with market expectations, largely due to falling energy prices, official data showed Friday.
Germany’s foreign minister called on Iran’s leadership to urgently provide credible assurances it is not pursuing nuclear weapons and to return to negotiations, amid growing fears of military escalation with Israel.
Berlin is preparing a new bill to accelerate arms purchases and prioritize domestic weapons production, aiming to respond swiftly to growing security threats triggered by the Russia-Ukraine war.
Germany’s Defense Ministry rejected claims on Monday that a German military tanker aircraft refueled Israeli jets involved in recent airstrikes on Iran, calling the reports unfounded.
Hungary has temporarily relocated its embassy from Tehran to Baku, citing rising security risks, Foreign Minister Péter Szijjártó announced in a video statement posted on social media.
The Trump administration has unveiled sweeping new sanctions targeting Iran’s defence supply chain and Yemen’s Iran-backed Houthi movement, intensifying efforts to block the flow of sensitive military technology and illicit oil revenues fueling regional instability.
China’s exports of rare earth magnets dropped sharply in May, plunging 52.9% from April to just 1,238 metric tons, their lowest monthly level since February 2020. The drop comes amid tightened export controls and growing customs scrutiny.
China has unveiled a mosquito-sized bionic drone designed for covert military operations and battlefield reconnaissance, marking a major advance in micro-robotics and stealth technology as part of the country’s growing focus on next-generation warfare capabilities.
Severe flooding triggered by heavy rainfall in southern China has forced the evacuation of about 70,000 people, local media reported on Wednesday.
Iranian missiles struck multiple locations across Israel and neighbouring regions early Friday morning, including a Microsoft office complex, according to emergency responders and local media reports.
Peace is no longer a dream. It is a discussion. On the streets of Baku and Yerevan, it is also a question, of trust, of foreign interests, and of who truly wants it.
Israeli strikes have reportedly targeted areas near the residences of Iran’s Supreme Leader Ayatollah Ali Khamenei and President Masoud Pezeshkian, according to the New York Times, citing local witnesses.
A high-speed tram derailment in central Gothenburg, Sweden, has left at least eight people injured late on Thursday (19 June), after the vehicle slammed into a snack bar on Avenyn Avenue.
The 2025 G7 Leaders’ Summit was held June 15–17 in Kananaskis, Alberta, under Canada’s presidency. Prime Minister Mark Carney framed the meeting around priorities of protecting communities, energy and climate security, the digital transition, and future partnerships.
Germany’s producer prices dropped 1.2% year-on-year in May, in line with market expectations, largely due to falling energy prices, official data showed Friday.
The World Bank is pushing for “radical” debt transparency from developing countries to prevent future financial crises, warning that hidden debts are fueling instability.
European stock markets ended the day in negative territory following interest rate decisions by major central banks, including the U.S. Federal Reserve (Fed) and the Bank of England (BoE).
South Korea’s new administration proposed $14.7 billion in additional spending on Thursday to boost weak domestic demand, as President Lee Jae Myung pushes economic recovery as his top priority.
If the European Central Bank adjusts interest rates in the next six months, the move would likely be a cut, ECB policymaker Francois Villeroy de Galhau said on Thursday.
Hungary has temporarily relocated its embassy from Tehran to Baku, citing rising security risks, Foreign Minister Péter Szijjártó announced in a video statement posted on social media.
The Trump administration has unveiled sweeping new sanctions targeting Iran’s defence supply chain and Yemen’s Iran-backed Houthi movement, intensifying efforts to block the flow of sensitive military technology and illicit oil revenues fueling regional instability.
China’s exports of rare earth magnets dropped sharply in May, plunging 52.9% from April to just 1,238 metric tons, their lowest monthly level since February 2020. The drop comes amid tightened export controls and growing customs scrutiny.
China has unveiled a mosquito-sized bionic drone designed for covert military operations and battlefield reconnaissance, marking a major advance in micro-robotics and stealth technology as part of the country’s growing focus on next-generation warfare capabilities.
Severe flooding triggered by heavy rainfall in southern China has forced the evacuation of about 70,000 people, local media reported on Wednesday.
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