Germany Reaches Historic Agreement on €500 Billion Infrastructure and Defense Fund

Union, SPD, and Greens secure consensus on debt-financed investments, setting a new course for climate and security policies.

The €500 billion special fund will finance infrastructure, climate initiatives, and defense, including expanded definitions for security-related spending.
The agreement includes €100 billion allocated to the Climate and Transformation Fund, with 'climate neutrality by 2045' now enshrined in the German Constitution.
The deal requires constitutional amendments to loosen the debt brake, with a two-thirds majority vote planned in both the Bundestag and Bundesrat next week.
The Greens successfully pushed for stricter criteria ensuring the funds are used for new projects rather than existing obligations or consumptive expenditures.
The package has drawn mixed reactions, with praise from environmental and economic groups but criticism from the AfD, FDP, and Left Party over its fiscal and policy implications.