Germany unveils €500B infrastructure fund, seeks to expand defence spending

Germany’s conservatives and Social Democrats announced plans on Tuesday to create a €500 billion fund for infrastructure and adjust borrowing rules to allow for a major increase in defence spending.

Pressure Grows Amid U.S. Uncertainty

Leaders of both parties, negotiating a new coalition government, said uncertainty over U.S. support for Ukraine following Donald Trump’s decision to freeze military aid had prompted the move.

CDU/CSU leader Friedrich Merz, expected to become Germany’s next chancellor, said Europe must be prepared to take greater responsibility for its security.

“In view of threats to our freedom and peace, whatever it takes must now apply to defence as well,” Merz said.

Proposed Constitutional Amendment

The CDU/CSU and SPD will propose an amendment to Germany’s constitution to exempt defence spending above 1% of GDP from the country’s debt brake. The motion will be submitted to the Bundestag next week.

Germany’s push for greater defence investment signals a shift in European security policy, as uncertainty over U.S. commitments continues to grow.

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