Merz pushes for 200 billion euro military fund before new parliament convenes

Friedrich Merz, leader of the CDU and likely next Chancellor, is pushing for a special fund of 200 billion euros for the Bundeswehr before the new Bundestag is formed.

The details are said to have already been discussed in talks with the current Federal Chancellor Olaf Scholz and the SPD leader and future parliamentary group leader Lars Klingbeil.

CDU and SPD officials want to discuss on Tuesday “ways to overcome strict restrictions on Germany’s public debt and fund the country’s struggling military,” people familiar with the matter told Bloomberg ahead of the meeting.

The source, who asked not to be named, added that Merz wanted “a vote in the Bundestag on the new package, which would be twice as high as the one approved three years ago.”

Jens Spahn, deputy chairman of the CDU parliamentary group, also confirmed that a defence spending package was being discussed. Spahn said on German television, “Friedrich Merz has indicated that he will hold talks, including with the FDP and the Greens. We will see in the coming weeks what kind of decisions we will take and whether we will take them at all.”

The vote must now take place because the AfD and the Left Party (Die Linke) have a blocking minority in the new parliament.

Outgoing SPD parliamentary group leader Rolf Mützenich believes that a reform of the debt brake or the creation of a new special fund is still possible in the old Bundestag.

Mützenich told a meeting of current and new SPD deputies in Berlin on Tuesday that he was ready to do anything, but he also made it clear that such an approach was politically controversial and blamed CDU leader Friedrich Merz for this.

In terms of political and democratic legitimacy, Mützenich described such fiscal policy decisions by the former Bundestag as “walking a tightrope.” Speaking of an approach “based on tactical considerations” that people cannot understand, the SPD leader accused Merz of “throwing his previous position overboard” within “only a few hours” after the election and said that he did not expect anything good “if this is the style of the new government.”

Merz’s style is highly controversial. Despite a new election, the Bundestag has so far met only once with the old composition: In October 1998 a majority voted in favour of NATO’s war of aggression against the former Yugoslavia, which violated international law.

The Left Party, whose votes in the newly elected Bundestag are likely to cause Merz’s plan to fail, criticised the approach.

“The Left Party has always opposed the debt brake and of course we continue to campaign for its abolition or at least a far-reaching reform, but under no circumstances will we accept a deceptive package designed only to enable further armaments,” parliamentary group leader Heidi Reichinnek told the Berliner Zeitung.

Instead, Reichinnek added, there should be extensive investment in education, infrastructure and the transformation of industry.

Katharina Dröge, parliamentary group leader of the Greens, signalled her approval of the armament plans but criticised the CDU’s approach. Dröge said it was a pity that Merz had rejected a reform of the debt brake with a two-thirds majority of CDU/CSU, SPD and Greens for party tactical reasons in the run-up to the general election, because it was urgently needed in view of the difficult situation in security policy.

However, Dröge added that the Greens also believe in more climate protection, improved infrastructure and investment in the economy. In her view, it would be wiser to reform the debt brake than to create a special fund for defence and then another fund for the economy and infrastructure.

Budget expert Jens Südekum pointed out that an amendment to the Constitution in the former Bundestag would risk being overturned by the Federal Constitutional Court.

Instead Merz should present a concrete package of reforms that can win the necessary two-thirds majority, Südekum said.

Even if Germany only wants to meet NATO’s 2% target, the new federal government will have to spend 30 billion euros more on defence each year from 2028 onwards, after the 100 billion special fund for the Bundeswehr expires.