Germany Reaches Landmark Deal on Defense, Infrastructure, and Climate Spending

The agreement exempts defense spending from debt limits and establishes a €500 billion fund for infrastructure and climate projects.

Chancellor-in-waiting Friedrich Merz and the Green Party agreed to a debt-funded spending package that includes €200 billion for defense and €500 billion for infrastructure over the next decade.
The deal allocates €100 billion to a climate and economic transformation fund, a key demand from the Greens during negotiations.
Germany’s constitutional 'debt brake' will be reformed to allow defense spending above 1% of GDP to bypass borrowing limits.
The package includes €3 billion in military aid for Ukraine, pending parliamentary approval next week.
Economic analysts project the infrastructure investments could boost Germany’s GDP growth by 2% annually over the next decade.