Germany approves large defense spending package unlocking aid to Ukraine
Photo: Bundestag approves massive spending package (Getty Images)
The upper house of the German parliament has approved a large-scale financial package. It provides for the abolition of the debt brake for defense spending, as well as the allocation of 500 billion euros for a special infrastructure fund, according to DW.
The vote in the Bundestag was the last for the bill. It needed 46 out of 69 votes for approval. In the end, 53 votes were cast in favor of the bill.
The main obstacle to allocating an additional €3 billion in military aid to Ukraine in 2025 has now been removed.
Financial package
The draft law practically abolishes the debt brake rule for spending necessary for the country's defense. The draft law states that expenditures on the Bundeswehr, as well as federal expenditures on civil defense, protection of the population, intelligence services, protection of information technology systems, and assistance to states under attack in violation of international law, can also be financed by loans in the future.
The new rules apply to all expenditures exceeding 1% of GDP, which corresponds to approximately 43 billion euros. CDU leader and likely future German Chancellor Friedrich described the significance of this rule in words: "Whatever it takes".
The strict ban on borrowing for the federal states should also be relaxed and reconciled with the federal government. All federal states together would be allowed to take on new debt of up to 0.35% of GDP. The distribution of the respective amounts will be regulated by federal law.
According to the approved law, 500 billion euros can be raised for infrastructure investments over the next 12 years. The federal states are to use €100 billion for their infrastructure, €300 billion will be transferred to the federal government, and the remaining €100 billion will be allocated for climate protection.
Emergency vote in Bundestag
The draft law was prepared by the CDU/CSU bloc and the Social Democratic Party of Germany (SPD), which are negotiating the formation of a new government. To pass the law, the parties agreed to have the Union-90/Greens party support the agreement. At the same time, the latter secured the allocation of 100 billion from a special fund of 500 billion exclusively for climate protection projects, and the text of the German constitution itself includes a clause on Germany's commitment to achieve climate neutrality no later than 2045.
At the same time, the conservatives, social democrats, and Greens will no longer have the necessary majority to pass the draft law in the new Bundestag, whose first meeting will be held on March 25, so the parliamentarians adopted it as part of the old Bundestag.
The Bundestag is a separate legislative body in Germany that de facto serves as the upper house of the German parliament. It represents the 16 federal states of Germany, which send several representatives of the state governments to it and has the right to approve or reject any bills that affect the interests of the federal states of Germany.
The German government agreed to allocate an additional €3 billion in military aid to Ukraine this year. The condition was the abolition of the debt brake on defense spending.
