Germany’s parliament has voted in favor of a significant boost to defense and infrastructure spending, marking a major shift in the country’s financial policies.
Lawmakers in the Bundestag approved the measure with the required two-thirds majority on Tuesday, clearing the way for one of the most substantial changes to Germany’s debt rules in recent history.
The decision allows defense spending to bypass Germany’s strict debt limits and establishes a €500 billion ($547 billion) fund for military and infrastructure projects. Traditionally cautious about taking on debt, Germany’s move signals a stronger commitment to European security, especially as Russia’s war in Ukraine continues and concerns grow over the United States’ commitment to NATO under President Donald Trump.
Before the changes take effect, Germany’s upper house, the Bundesrat, must also approve them by a two-thirds majority. That vote is scheduled for Friday.
Friedrich Merz, the leader behind the proposal and expected to become Germany’s next chancellor, said the country had relied too much on a “false sense of security” over the past decade. He described the decision as a crucial step toward building a new European defense alliance that could include non-EU countries.
The measure removes defense spending from Germany’s “debt brake,” a constitutional rule that limits federal borrowing to 0.35% of GDP. Merz’s CDU party, which won the general election last month, pushed the proposal forward quickly, fearing that political shifts in the coming weeks could make approval more difficult.
In an interview on Sunday, Merz pointed to increasing uncertainty about U.S. support for European defense, citing Trump’s recent meetings with Russian President Vladimir Putin. He argued that Germany must act urgently to strengthen its military capabilities.
The move has faced opposition from both the far-right AfD and the far-left Linke parties, which made gains in the February election. Despite this, Merz moved swiftly to secure approval from the current parliament, where support was more certain.
Merz has yet to finalize a coalition government but has expressed confidence that a new administration will be in place by Easter. However, forming a coalition in Germany is often a lengthy process, and negotiations could take months.