Germany's Bundestag votes in favor of reforming 'debt brake'

Outgoing Chancellor Olaf Scholz has praised Germany's "historic" decision to lift limits on strict borrowing rules which will allow the country to massively increase military spending. 

Scholz made the comment after a two-thirds majority of parliamentarians — the number required to make the change to the constitution — approved the amendments on Tuesday.

Germany is "loosening the shackles, which have so far prevented us from spending sufficient funds on our defense," said Scholz, speaking in Berlin alongside French President Emmanuel Macron.

"By strengthening the European pillar of NATO, we will strengthen the trans-Atlantic alliance as a whole."

Thomas Silberhorn, a Bundestag member from the center-right CDU, told DW that his party had changed its stance and voted for the landmark amendment because Germany's "threat perception had changed."

Russia wasn't just fighting a war against Ukraine, but it was also a threat to Germany. 

"We are [the] object of Russian cyberattacks, of espionage and of sabotage every day in Germany," said Silberhorn, the spokesperson for the CDU and its sister CSU's parliamentary group for trans-Atlantic relations.

With the United States under Donald Trump also raising questions about its solidarity to Europe and NATO, "we have to readjust our threat perception and take our own security in our hands," Silberhorn said. 

"That's why we decided to do whatever it takes to make Germany safe and to enable us to defend our country and our partners in Europe."

Increasing defense funding was one of the "preconditions" of strengthening Germany's armed forces, said Silberhorn, who was previously state secretary in Germany's Defense Ministry. 

But he warned that Germany also needed to step up recruitment. 

NATO Secretary General Mark Rutte took to social media to congratulate the outgoing and incoming chancellors of Germany for their "historic agreement" to boost defense investment by reforming the debt brake.

"This sends a powerful message of leadership and commitment to our shared security. It will make a profound difference in NATO’s ability to deter and defend," Rutte wrote on social media.

Karl Lauterbach, Germany's outgoing health minister from SPD, called the decision to relax constitutional rules to increase borrowing by billions of euros for investments in defense and infrastructure a "historic" one.

"The historic vote in favor of more investment and improved defense capabilities was successful. It's simply sensible. We must not be left defenseless or allow the country to be ruined by austerity measures. A good day," he wrote on social media.

Lauterbach's SPD voted with CDU/CSU to push the spending bill through parliament. The two parties are set to form the next governing coalition.

Katja Mast, the SPD's chief whip in the Bundestag, also praised lawmakers for their decision to set up an additional special fund of €500 billion ($545 billion) to boost the country's economy.

"With a special fund of €500 billion, we are launching the largest infrastructure program in German history," she told news agency Reuters.

Mast said the move hits a positive note when it came to creating more jobs since states can now invest better in "schools, daycare centers and swimming pools."

Funds will be used to reduce bureaucracy and improve digitalization, heralding the beginning of a new era of growth for Germany.

"Today is the beginning of not leaving any infrastructure debt for future generations," Mast said.

Germany's decision to increase public investment and relax constitutionally enshrined borrowing rules to allow higher defense spending is excellent news, EU Commission President Ursula von der Leyen said.

"It sends a very clear message to Europe that Germany is determined to invest massively in defense," von der Leyen told a joint news conference with Danish Prime Minister Mette Frederiksen in Copenhagen.

Speaking alongside her, Frederiksen said: "As a neighboring country it's fantastic news because we need a strong Europe."

The leader of the far-right populist AfD party, Alice Weidel, has sharply criticized the Bundestag's vote in favor of reforming the "debt brake."

"Gigantic debts have been agreed to. The election losers SPD and Greens are popping corks," Weidel said in Berlin. 

According to Weidel, today's decision will fall on the feet of future generations, consumers and taxpayers. She warned of distortions in the credit markets, rising interest rates and a "spillover to the other euro states." 

"This is the death blow for the euro," she claimed.

Green Party co-leader Franziska Brantner reacted proudly to the Bundestag vote in which her party joined the CDU/CSU and SPD in passing the debt brake reform.

"We've taken responsibility where others would have chickened out long ago," Brantner wrote on social media.

"Now it's up to the CDU/CSU and SPD to show that they can really do it. Climate protection, infrastructure and security will no longer fail because of money. Only because of political will," she added.

The Greens will be in opposition in the incoming Bundestag, where the CDU/CSU and SPD are likely to form a coalition.

The party had initially opposed plans by Germany's likely next chancellor, Friedrich Merz, to ease the debt brake, pointing out that he had promised not to do so before Germany's 23 February election.

However, in talks to secure their support for the recent vote, the Greens won a promise of €100 billion ($109 billion) in climate investment.

Germany's lower house of parliament, the Bundestag, backed several amendments to the country's constitution that would allow future federal and state governments to take on more debt.

A total of 513 MPs voted in favor of the amendments, while 207 voted against. A two-thirds majority (489 votes) was required for the planned reform.

The changes were made with the votes of the CDU/CSU, SPD and Greens, who agreed in principle to the proposals last week.

The legislation now goes to the upper house of parliament, the Bundesrat, where a vote is scheduled for Friday.

DW's political correspondent Michaela Kuefner has said a vote in favor of the changes would give chancellor-in-waiting Friedrich Merz a free hand when it comes to defense spending.

"It means he would have the money to do what he says he wants to do, which is for Germany to take more of a leading role in Europe... spending more on European defense. That's something that he stressed very much."

"He effectively has a blank check when it comes to defense spending which is fully exempt from the debt brake once it is above 1% GDP [gross domestic product] which it already is. That would then just require his government to decide that they want to increase defense spending."

Alternative for Germany co-leader Tino Chrupalla has accused the conservative CDU/CSU and center-left Social Democrats of a "spectacle" in bringing the vote on the debt brake before the outgoing Bundestag.

The package has been brought to the old parliament rather than the newly elected one, due to hold its first session on March 25, because parties that were unlikely to agree to the change have just over one-third of the seats in the new chamber. 

Chrupalla said that after Chancellor Olaf Scholz lost a vote of confidence in parliament — paving the way for new elections — the old Bundestag was denied the ability to make far-reaching decisions.

The AfD lawmaker said the old Bundestag was being used to cement the future government because only the old Bundestag had the majority for it.

"What a spectacle you're subjecting the citizens and our voters to," said Chrupalla. "The most valuable asset politicians have is credibility. With these embarrassing actions, dear Mr. Merz, you've already completely lost yours."

"The voters feel betrayed by you — and rightly so," said Chrupalla.

The parliamentary group leader of the neoliberal Free Democrats (FDP), Christian Dürr, has spoken, accusing the conservative CDU/CSU and center-left Social Democrats of "unbridled debt-mongering." 

Dürr accused Merz of putting together "a debt coalition that is prepared to sacrifice tomorrow's prosperity for short-term electoral gifts."

Dürr said that, for the fiscally cautious FDP, Germany's "debt brake" was not a principle of dogma but a means to an end.

"It protects the generations of our children and grandchildren from political incapacity — and, in reality, it ensures that one can still take on debt in times of need."

Before February's federal election, the FDP had expressed an interest in joining a future coalition with Merz's CDU, but failed to get above the 5% vote threshold to enter the new parliament.

Politics can be a cruel business.

Many may be wondering where Chancellor Olaf Scholz is in all this? 

The outgoing chancellor is sitting passively throughout this entire debate, occasionally rolling in his chair, or reading on his phone. Planning a holiday perhaps?

Scholz is watching as his rival Friedrich Merz puts one hand on the reins of power. 

If Merz can get these measures through parliament today, he'll be well on the way to agreeing a coalition deal with the SPD that will see him become chancellor. 

It's all part of the gradual handover of power but to see such profound changes being decided over the head of a lame duck chancellor is extraordinary. 

Despite her party giving backing to the proposed bill, Green parliamentary group leader Britta Hasselmann sharply attacked the conservative CDU/CSU bloc for political opportunism.

The Greens have repeatedly criticized the conservatives for changing tack on the need for spending since the February 23 election. Ahead of this, Friedrich Merz's Christian Democrats had dismissed the need for borrowing.  

"The conditions today are no different than they were in October 2024," said Hasselmann. "Everyone knew that this country urgently needed investment. "The Greens and the SPD [center-left Social Democrats] had campaigned together for this."

"We asked you to accompany us on this path," Hasselmann said, adding that the CDU/CSU had categorically rejected this.

"You said: 'There is no need for this in our country.' After all, we don't have a revenue problem, but a spending problem." 

"How deeply you have defamed my colleagues. Defamed them for their ideas and for their struggle to ensure that we invest in this country." 

Hasselmann cited an investment backlog in municipalities, the railways, and climate protection. "You categorically rejected all of this — and mostly with such arrogance and populism that it made one sick."

Germany's expected next Chancellor Friedrich Merz has told the Bundestag lower house of parliament that Germany has failed to recognize the precarious nature of European security in recent years — and that it must act now.

Merz made the observation as he promoted a planned increase in borrowing to fund defense spending and revive growth, saying that it would herald a new era for European security.

"We have for at least a decade felt a false sense of security," said Merz, adding that nothing short of a total rebuilding of Germany's defense capabilities was needed.

"The decision we are taking today on defense readiness ... can be nothing less than the first major step toward a new European defense community, which also includes countries that are not members of the European Union," he said.

Friedrich Merz, Germany's chancellor in waiting, began his speech on this historic day to a chorus of heckles from the far-right Alternative for Germany benches. 

One of Merz' backbench lawmakers shouted at them to shut up.

The schoolyard theatrics are a reflection of the tense mood in the Bundestag today. 

That's because an eye-watering infrastructure investment package, and the removal of fiscal limits on defense spending are on the agenda. 

And it's being pushed through in the last day of the old parliament by the man who will most probably be chancellor in the next parliament. In a word: controversial. 

The proposals will allow Germany, as Merz famously said, to do "whatever it takes" to strengthen the Bundeswehr and allow Europe to defend itself again.

But his critics on the far-left and the far-right oppose the plans. The Left party is against remilitarization, as they see it. The AfD agrees on increased defense spending but believe borrowing to do so will crush Germany's reputation for fiscal prudence.