Germany Nears Historic Finance Reform with €500 Billion Debt-Funded Package

Union, SPD, and Greens finalize a landmark agreement to amend the constitution, enabling major investments in defense, infrastructure, and climate initiatives.

The proposed €500 billion package aims to fund additional investments in infrastructure, climate initiatives, and defense, requiring changes to Germany's constitution.
A key provision allocates €100 billion to a Climate and Transformation Fund, embedding 'climate neutrality by 2045' into the constitution for the first time.
The Bundestag and Bundesrat must achieve a two-thirds majority for the constitutional amendments, with uncertainties remaining over Bavaria's support in the Bundesrat.
Critics, including some CDU and FDP members, argue the plan undermines fiscal responsibility and lacks sufficient deliberation time for such sweeping changes.
The package is seen as a significant political compromise, with the Greens securing climate priorities and the CDU-SPD coalition emphasizing national security and economic growth.