Germany Considers Expanding Defense and Infrastructure Budgets with New Debt

Proposals for massive special funds spark debate as CDU and SPD negotiate coalition priorities following recent international tensions.

German leaders are discussing creating new special funds for defense and infrastructure, potentially exceeding €900 billion in combined debt.
The CDU and SPD are in coalition talks to address urgent defense needs and economic challenges, with a focus on maintaining fiscal responsibility under the debt brake rules.
Brandenburg CDU leader Jan Redmann supports defense investments, citing recent U.S.-Ukraine tensions as a wake-up call for stronger European defense capabilities.
Economic experts warn that rapid borrowing for large-scale projects could exacerbate inflation and strain labor and resource availability in Germany.
The EU is expected to allow flexibility in budget rules to accommodate defense spending, but questions remain about funding infrastructure projects under these provisions.