Germany – Whatever it takes 2.0
The CDU/CSU and SPD want to largely exempt defense spending from the debt brake and create a special fund of 500 billion euros for infrastructure.
Commerzbank Economic Research
03/05/2025
The likely future coalition partners CDU/CSU and SPD agreed on massive additional spending yesterday evening with regard to budget policy. CDU leader Friedrich Merz spoke of “whatever it takes”, alluding to the rescue policy of then ECB President Mario Draghi. In detail, the following points were discussed:
- Defense spending of more than 1% of gross domestic product is to be exempt from the restrictions of the debt brake.
- A shadow budget (“special fund”) of EUR 500 billion is to be created for ten years for infrastructure spending, of which EUR 100 billion is to go to the federal states.
- The federal states, which have so far been forced by the debt brake to have balanced cyclically-adjusted budgets, are to be allowed to take on more debt.
The old Bundestag is due to approve the changes next week. For the necessary two-thirds majority, the CDU/CSU and SPD need broad support from the Greens or the full support of the FDP, which has always been opposed to softening the debt brake.
For full text see attached PDF-Version.
