Germany’s €1 trillion debt plan is facing serious hurdles, and if it falls apart, the incoming government could be in for a rough ride. Just after the election, the Christian Democrats (CDU) and their new Social Democrat (SPD) partners eagerly unveiled a proposal to spend a trillion euros on weapons and infrastructure, contingent on suspending the country’s “debt brake.” But now, cracks are starting to show.
The Greens have made it clear they won’t back the deal unless it includes significant investment in climate infrastructure and foreign aid. The CDU seems willing to accommodate these demands, but even if they do, more obstacles lie ahead, including a crucial vote in the Bundesrat, Germany’s upper house, which consists of state governments.
The clock’s ticking, too—March 23 is the deadline. After that, the new Bundestag will be in place, and the new party makeup could make it impossible to secure the two-thirds majority needed to amend the constitution.
The Greens hold all the cards now. The liberal Free Democrats (FDP), along with the Alternative for Germany (AfD) and The Left Party, have already stated they won’t agree to lift the debt brake, leaving the CDU and SPD with just the Greens as potential allies.
However, the Greens have little incentive to play ball. The CDU had blocked lifting the debt brake during their time in power, contributing to the collapse of the previous government. To make matters worse, the CDU’s sister party, the CSU, relentlessly attacked the Greens during the election. Now, the Greens are expected to support a massive spending package for projects that don’t align with their priorities.
Negotiations are still underway, and the Greens may settle for a compromise if the CDU is willing to throw enough money their way. But some in the party remain wary of cutting such a deal, fearing it would give the CDU and SPD too much political leverage.
The Bundesrat also poses a major challenge. In eastern Germany, the FDP, the Left Party, and the Greens have already shot down the plan, and even in Bavaria, the CSU’s Markus Söder hasn’t convinced his smaller coalition partners, the Free Voters, to back the deal. If a state government can’t reach an agreement in the Bundesrat, it must abstain from voting, which is counted as a “no” vote. So far, the CDU and SPD have only secured votes from four states they govern: Hesse, Saarland, Saxony, and Berlin. They still need a two-thirds majority to pass the plan.
Green Party officials in the states are also skeptical. “Without key changes, we can’t accept this law. Negotiations need to be held quickly to address the states’ concerns,” said top Greens officials.
If the deal falls through, the CDU and SPD could find themselves in a tough spot. If they want to spend, they’ll have to make cuts, and that could lead to serious tensions. For example, migration alone is costing Germany between €50 billion and €75 billion annually, and neither party has clear solutions for lowering those costs. NGOs are receiving billions in funding, and the SPD is determined to keep that cash flowing. The battles over spending could quickly spiral out of control, potentially derailing the new government. Without the cushion of a trillion euros, the honeymoon for the CDU and SPD could end much sooner than anyone anticipates.
