Germany's designated new government agrees on largest-ever defense and infrastructure spending push

Germany's likely next chancellor, Friedrich Merz has announced plans to raise hundreds of billions of euros to boost defense and infrastructure amid fears that the United States is losing interest in Europe and the NATO alliance. The announcement came amid exploratory talks between Merz's Christian Democrats (CDU), along with its Bavarian sister party the Christian Social Union (CSU), and the Social Democrats (SPD). Merz made the announcement alongside the CSU's Markus Söder and the SPD co-leaders Lars Klingbeil and Saskia Esken. It comes just over a week after the CDU won Germany's federal election. Merz has said he aims to form a government coalition with the SPD. The leaders said they had agreed to table a motion in parliament to alter the German constitution in order to ease controls on defense expenditure which surpasses 1% of Germany's GDP from debt brake limits. Based on German GDP in 2024, that would include all expenditure above approximately €45 billion ($43 billion). Furthermore, the country's 16 individual federal states are also to be permitted to take out loans up to the equivalent of 0.35% of their economic output in order to further boost performance.

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