Germany to face barriers as it looks to grow defense

The man most likely to be Germany's next chancellor hopes to be able to unlock significant extra resources for expenditure on defense before Thursday's emergency European Union summit, but faces a race against time and some political horse trading to secure the necessary support.

Friedrich Merz's center-right Christian Democratic Union and Christian Social Union alliance, known as the CDU-CSU, emerged as the winner of the country's recent election but has not yet finalized a governing coalition, something it is likely to do with parliament's third-largest party, the Social Democrats, or SPD.

Restrictive rules around Germany's debt mean Merz would need a two-thirds majority to set up a special extra-budgetary defense spending fund, and given the current tense situation regarding the United States, Ukraine, and European security, Merz said "the urgency is great from my point of view".

But he has not given specific details, saying "I can't tell you the pathway (to higher spending), nor can I give you any figures today … it's all open", a lack of certainty that has concerned some political opponents.

SPD General Secretary Matthias Miersch has said his party would not support any change purely for defense reasons, and there must also be a national infrastructure angle to any proposed new budgetary set-up.

"There is an enormous need for investment and we won't create consent for it if we just invest in defense," he said. "The two (defense and infrastructure) need to be considered together."

SPD co-chairman Lars Klingbeil said a "big package" of funding for the country's railways, schools, and wider security measures was on the table.

Reuters reported that any special funds for defense and infrastructure could be worth as much as 400 billion euros ($417 billion) and 500 billion euros respectively, which Deutsche Bank said would be close to the amount invested in the former East Germany since reunification in 1990, calling it "a fiscal regime shift of historic proportions".

Because the new parliament is still some weeks away from sitting, Merz may try to rely on the make-up of the last one to approve the constitutional change needed to permit the new spending policy.

But in that chamber, the CDU-CSU and SPD still need the support of more than 80 members from other parties, with the Green Party's bloc of 116 seats the likeliest target. However, the Greens have made it clear they will not simply comply with the request, and have strong opinions on the topic.

Party co-chair Felix Banaszak said the Greens would be open to discuss the issue but remained cautious about rushing through any special funds, while Sara Nanni, the party's lead on defense issues, suggested "special funds create planning security for enemies", as they would give clues as to when expenditure might dry up, causing longer-term weakness.