Germany's massive spending deal in doubt as Greens reject plan

Yahoo

10-03-2025

A massive plan to loosen Germany's debt rules and spend hundreds of billions on defence and infrastructure has run into potentially decisive opposition from the Greens, whose votes in parliament would be essential for the legislation to be approved.
The spending deal was struck by the conservative Christian Democrat (CDU)/Christian Social Union (CSU) bloc, which won February's German election, and the centre-left Social Democrats (SPD), who are expected to become the junior coalition partner in the next government.
Green politicians have been warning for days that the massive spending deal does not do nearly enough to address climate change and might be used as a way to finance tax cuts instead of dramatically higher overall spending.
Green parliamentary group co-chairwomen Katharina Dröge and Britta Hasselmann confirmed on Monday that they would recommend that Green lawmakers vote against the package.
"We are in no way interested in enabling play money, and that is why we will not agree to these proposals," Dröge told reporters. "The package will not finance a single euro more in investments in Germany."
Dröge said that the CDU/CSU alliance and the SPD wanted to create a massive fund of borrowed money to put towards things like tax breaks and diesel fuel subsidies for farmers.
The Greens have been demanding more funding for climate priorities and greater commitments about how the money would be spent.
A failure of the spending deal would be a major setback for the CDU/CSU and SPD coalition talks, which are set to formally get under way soon. Any budget agreement between the two parties would be far more difficult without the deal.
Senior CDU/CSU and SPD politicians on Monday expressed confidence that a compromise could still be struck to placate the Greens and get the deal through the Bundestag, the lower house of Germany's parliament.
The votes of the Greens are essential to enacting the deal, since Germany's strict balanced-budget rules are anchored in the country's constitution and any changes require a two-thirds majority in the Bundestag.
Greens to be persuaded?
The deal between the CDU/CSU and SPD would create a €500 billion ($542 billion) special fund for infrastructure investments to be spent over the next decade, and enable far higher long-term military budgets by permanently exempting any defence spending above 1% of German gross domestic product (GDP) from counting toward debt rules.
Not long after Dröge and Hasselmann made their opposition clear, leaders in the CDU, CSU and SPD signalled their willingness to negotiate with the Greens in order to seal a deal.
Carsten Linnemann, the secretary general of the CDU, said he expects negotiations over the deal to move forward with the Greens and described ideas put forward by the Greens as "constructive proposals."
CSU deputy leader Alexander Dobrindt, meanwhile, believes the Greens will eventually back down and support the plans.
"This will not be the last word from the Greens," he said. "The security situation requires a different approach. We are prepared to negotiate further."
SPD leader Lars Klingbeil likewise said he expects to find a compromise with the Greens despite their initial rejection of the deal.
"I am not giving up confidence that this can succeed," he said.
Klingbeil said he would seek talks with top Green Party politicians on Monday evening along with conservative leader and prospective chancellor Friedrich Merz.
The parties are hoping to pass the changes through the outgoing Bundestag in the coming days, since the results of Germany's February election mean that assembling the necessary two-thirds majority will become more difficult once newly elected lawmakers are seated.
A deal would then need to be struck with The Left, a hard-left socialist party that has been vehemently opposed to military spending. That would be far more difficult, especially for the conservative CDU/CSU.
Leaders of The Left on Monday announced that they had filed an emergency application with Germany's Constitutional Court for a temporary restraining order to block a possible vote on the proposal, which they described as an undemocratic attempt to cast aside the will of German voters.
Politicians with The Left said they have long demanded major reforms to Germany's debt rules, and urged the other parties to invite them to talks on spending plans.
But Linnemann said he does not believe that the CDU/CSU could reach an acceptable compromise with The Left.