In coalition talks, the Christian Democrats (CDU/CSU) and Social Democrats (SPD) are preparing a huge increase in defence spending and corresponding social cuts. Another “special fund for the Bundeswehr” (Armed Forces) amounting to €400 billion and a special infrastructure fund of €400 billion to €500 billion are under discussion. Together with the €100 billion pot for the Bundeswehr decided three years ago, this would amount to additional expenditure of almost €1 trillion, more than double the current federal budget.
The proposal originated from four leading German economists: Clemens Fuest, president of the Ifo Institute; Michael Hüther, director of the German Economic Institute; Moritz Schularick, president of the Kiel Institute for the World Economy; and Jens Südekum, an economist at the University of Düsseldorf. The four were discussing the fiscal policy options of the future federal government at the initiative of Saarland Finance Minister Jakob von Weizsäcker (SPD).
According to weekly Die Zeit, which has seen a copy of the discussion transcript, the four economists are in favour of the two special funds being approved before the start of the new legislative period, in the old Bundestag (parliament) where the CDU/CSU, SPD and Greens have the necessary two-thirds majority, which is no longer the case in the newly elected one.
The CDU and SPD are discussing corresponding plans in their exploratory coalition talks, even though there is little concrete information on this, as both sides have agreed to maintain strict secrecy. For example, Bild tabloid reported that Chancellor-designate Friedrich Merz (CDU) is planning a special session of the Bundestag for March 10.
What is certain is that the new government will rearm at a rate last seen under Hitler, and everything else will be subordinated to this goal. After the open rift between President Donald Trump and Ukrainian President Volodymyr Zelensky, numerous representatives of the CDU/CSU, SPD and the Greens have expressed their views accordingly.
The coalition negotiations between the CDU/CSU and SPD are being pushed forward at a rapid pace, on the grounds that Germany must demonstrate its ability to act and its readiness to defend itself.
CDU parliamentary secretary Thorsten Frei said, “Both sides are aware that the world and Europe will not wait for Germany.” He added that foreign policy events had taken a turn for the worse in recent days and that Germany needed to be able to act. “To do that, we need a federal government very quickly that is able to take control.”