Overview

• The Union and SPD have agreed to reform Germany's constitutional debt brake, allowing increased borrowing for infrastructure and defense spending.
• The proposed changes include exempting defense spending over 1% of GDP and creating a €500 billion infrastructure fund over ten years.
• Amending the debt brake requires a two-thirds majority in the Bundestag, necessitating support from additional parties like the Greens.
• In Bavaria, the reform faces resistance from coalition partner Freie Wähler and skepticism from the Greens, complicating efforts to secure a two-thirds majority in the state legislature.
• If approved at the state level, Bavaria's constitutional amendment would also require a public referendum to finalize the changes.