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."
Iran has sent its response to a U.S. proposal aimed at ending the war through mediator Pakistan, according to IRNA, as Qatar’s Prime Minister...
Health authorities are monitoring a widening hantavirus alert after new suspected cases emerged in Spain and on a remote South Atlantic island, day...
Slovak Prime Minister Robert Fico has cited Azerbaijan as an example of what he described as a sovereign foreign policy, recalling rem...
China’s exports grew faster than expected in April, as overseas buyers moved quickly to secure supplies a...
Russia is holding a significantly scaled-back Victory Day parade in Moscow on 9 May 2026, reflecting heightened security concerns and the ongoing w...
A 77-year-old man and a 63-year-old woman were killed on Monday (4 May), after a man drove a car into a crowd on a pedestrianised street in the the eastern German city of Leipzig, authorities said.
European allies are stepping up efforts to meet military commitments following criticism from U.S. President Donald Trump, according to NATO Secretary General Mark Rutte.
Germany has said a planned reduction of U.S. troops should push Europe to take greater responsibility for its own defence, as concerns grow in Washington over the impact of the move on regional security.
International cyber agencies on Thursday (23 April) urged organisations to strengthen defences against covert networks used by China-linked hackers to conceal malicious activity, Britain’s National Cyber Security Centre (NCSC) said.
Efforts to end the U.S.-Iran war appeared to stall as the two sides exchanged fire in and around the Strait of Hormuz. A reported CIA assessment suggested Tehran could withstand a U.S. naval blockade for months despite mounting sanctions and renewed Gulf attacks.
The U.S. and Iran exchanged fire in and around the Strait of Hormuz, though both sides signalled they did not want escalation. The clashes come as Washington awaits Tehran’s response to a proposed deal to end the war while leaving key disputes, such as Iran’s nuclear programme, unresolved for now.
Russia is holding a significantly scaled-back Victory Day parade in Moscow on 9 May 2026, reflecting heightened security concerns and the ongoing war in Ukraine, now in its fourth year.
Health authorities are monitoring a widening hantavirus alert after new suspected cases emerged in Spain and on a remote South Atlantic island, days after an outbreak on a cruise ship left three people dead and several others infected.
Indonesian rescue teams have located two Singaporeans who went missing after Mount Dukono erupted on Friday (8 May) on the island of Halmahera, though authorities say it remains unclear whether they are alive.
China’s exports grew faster than expected in April, as overseas buyers moved quickly to secure supplies amid fears that the conflict involving Iran could drive up global energy and transport costs.
Asian stocks surged to record highs on 7 May as investors priced in growing hopes of a potential Middle East peace deal, while oil prices eased and the U.S. dollar weakened amid shifting global risk sentiment.
Stocks around the world climbed to fresh record highs on Wednesday (6 May), while oil prices fell sharply, after reports suggested the United States and Iran were nearing an agreement to end conflict.
U.S. President Donald Trump has said he will raise tariffs on cars and trucks imported from the European Union to 25% next week, up from the 15% level agreed last year, accusing the bloc of failing to comply with its trade commitments.
The decision by the United Arab Emirates to leave OPEC+ on 1 May has put renewed focus on one of the most influential groups in global energy - and how its decisions can shape oil prices worldwide.
You can download the AnewZ application from Play Store and the App Store.
What is your opinion on this topic?
Leave the first comment