Germany’s chancellor-in-waiting Friedrich Merz made concessions to the Greens on the first day of the old parliament reconvening for an emergency session to approve his “historic” spending package.
Addressing MPs on Thursday, the leader of the Christian Democratic Union and the winner of last month’s federal elections vowed to allocate one-tenth of a planned €500bn infrastructure fund to the green transition, in a clear attempt to lift opposition to his plan.
“What do you actually want in such a short period of time?” Merz told the Green MPs — many of whom were smiling at his charm offensive. “What more could you want?”
The pool of cash for infrastructure investment and a reform to allow unlimited borrowings to fund defence spending are part of a breakthrough deal between the CDU chief and his likely coalition partners, the Social Democrats (SPD).
But the Greens, reeling from a bruising election campaign, have emerged as a significant hurdle in Merz’s attempts to force the constitutional changes through the outgoing parliament, in which his bloc combined with the SPD and the Greens enjoy a supermajority until next week.
“We may be faced with a profound historic decision for our country,” Merz pleaded as he outlined a US pullback from Europe’s security and the prospect of tough discussions in June when Nato members meet to discuss spending.
“Any further delay would be unfair . . . Germany must return to the international stage as an effective agent in Europe, in Nato and in the world.”
Merz has recalled the outgoing Bundestag, which is legally valid until March 25, out of concern that his reforms would be blocked in the new parliament by the far-right Alternative for Germany (AfD) and far-left Die Linke, which both recorded electoral gains in February’s election.
MPs are scheduled to vote on the spending package on Tuesday, and the second chamber will vote on March 21.
In an ironic twist, the criticism from the Greens is that Merz’s reform is too fiscally lax and a trick to fund “elections gifts” such as tax cuts and social benefits. A plan to exclude defence from the borrowing limit for all spending above 1 per cent of GDP created too much budget leeway, they said, suggesting lifting the threshold to 1.5 per cent of GDP.
They are pushing for a broader reform of Germany’s debt brake — which caps borrowing to 0.35 per cent of the budget on any given year — to be debated in the new parliament, pleading for time and greater consensus for such a fundamental decision.
On Thursday, Katharina Dröge, co-head of the Green parliamentary group, criticised Merz for opposing debt brake reform under the outgoing coalition led by SPD chancellor Olaf Scholz. “If you yourself believe what you said here, why didn’t you act earlier?” she asked Merz.
Despite the fiery debate in parliament, politicians from the CDU/Christian Social Union, SPD and Greens believe a compromise can be reached in the next few days, including on the defence spending exemptions.
In addition to a commitment to allocating funds for the green transition, Merz has offered to extend the infrastructure fund from 10 to 12 years to limit the extra debt burden.
“What the Greens want is not that complicated and I can’t think of any argument as to why we couldn’t reach a deal,” Daniel Günther, CDU state president of Schleswig-Holstein, who governs in a coalition with the Greens, told the Financial Times. “It’s doable to reach an agreement by Monday.”
Danyal Bayaz, the Green finance minister of Baden-Württemberg, said: “The Greens are very much aware of their responsibility in government but also in opposition.”
“I’m positive that we will find a common solution. But it’s also up to the others to move towards us on the points that are important to us, including a higher share of investments for climate protection.”
Bayaz sounded confident that the second chamber would also back the package if the Bundestag approved it while Günther did not believe legal challenges lodged by the AfD and Die Linke would be successful.
However, both Merz and SPD co-leader Lars Klingbeil remained adamant on Thursday that the spending plan covering defence and infrastructure should be voted as one package next week.
It was necessary to boost growth to be able to increase defence spending without taking on excessive borrowing, Merz noted. “The question remains as to how we can now get out of the economic crisis just as quickly,” he said.
Additional reporting by Laura Pitel and Olaf Storbeck
