Germany Reaches Landmark Debt Deal to Boost Defense, Infrastructure, and Climate Spending

The agreement exempts defense spending from debt limits and establishes a €500 billion fund for infrastructure and climate initiatives, pending parliamentary votes next week.

Germany's CDU, SPD, and Greens have agreed to exempt defense spending above 1% of GDP from the constitutional debt brake, enabling increased military investment.
The deal includes a €500 billion infrastructure fund over 12 years, with €100 billion allocated to climate and economic transformation projects as part of Green Party concessions.
A €3 billion military aid package for Ukraine is expected to be approved as part of the broader spending plan.
The agreement aims to address Germany's economic stagnation, strengthen European defense, and reduce reliance on U.S. security guarantees.
The package faces final votes in the Bundestag and Bundesrat next week, with challenges anticipated from far-right and far-left parties.