Germany’s potential new government is exploring the creation of two special funds, each worth hundreds of billions of euros, to boost defence and infrastructure, according to three sources familiar with the discussions.
Economic advisors estimate that approximately 400 billion euros ($415 billion) would be required for the defence fund, while the infrastructure fund could range between 400 billion and 500 billion euros.
A heated meeting on Friday between Ukrainian President Volodymyr Zelensky and U.S. President Donald Trump has intensified the urgency in Berlin to accelerate defence spending, both for Germany and for Ukraine, the sources said.
Senior members of Germany’s conservative and Social Democratic parties began preliminary coalition talks on Friday, aiming for Friedrich Merz, leader of the conservative bloc, to form a government by Easter following last week’s election victory.
The discussions involve the Christian Democrats (CDU), the Bavarian Christian Social Union (CSU), and the Social Democrats (SPD) of Chancellor Olaf Scholz. While details are still being worked out, no final decisions have been made, according to the sources.
The parties declined to comment, citing the confidentiality of the negotiations.
