Germany's CDU and SPD Agree on Historic Debt-Financed Infrastructure and Defense Package

The proposed €500 billion infrastructure fund and defense spending reforms face criticism and require a two-thirds parliamentary majority for approval.

CDU and SPD leaders have agreed to a €500 billion infrastructure fund over ten years, requiring a constitutional amendment to bypass the debt brake.
The plan includes defense spending reforms, exempting military expenditures exceeding 1% of GDP from Germany's debt limit, with no specified cap on spending.
Critics from the FDP, Greens, and other parties have raised concerns about the fiscal sustainability and lack of focus on climate initiatives in the proposed package.
The agreement seeks to address economic stagnation and bolster Germany's military capabilities amid shifting geopolitical dynamics, particularly reduced U.S. support for Ukraine.
The proposal must secure a two-thirds majority in both the Bundestag and Bundesrat, necessitating support from opposition parties like the Greens or FDP.