The German parliament, the Bundestag, has approved a significant increase in government spending, marking a departure from decades of fiscal conservatism, Al Jazeera reports.
The move aims to stimulate economic growth and bolster military spending in response to a shifting geopolitical landscape in Europe.
The approval on Tuesday provides the incoming chancellor with a substantial windfall, potentially amounting to hundreds of billions of euros, to boost investment after two years of economic contraction in Europe’s largest economy.
Germany and other European nations have been facing mounting pressure to strengthen their defenses amid growing concerns over a more assertive Russia and potential shifts in U.S. foreign policy under President Donald Trump. European leaders fear these changes could leave the continent vulnerable.
The proposed legislation seeks to create a 500-billion-euro ($546 billion) fund for infrastructure development and loosen constitutionally enshrined borrowing rules to facilitate increased spending on security. The plan has been championed by both the conservative Christian Democratic Union (CDU) and the Social Democratic Party (SPD), currently in negotiations to form a centrist coalition government following last month’s election.
While the legislation still requires approval from the Bundesrat, the upper house representing Germany’s 16 federal states, the main obstacle to its passage appeared to be cleared on Monday when the Bavarian Free Voters agreed to support the plans.
The CDU and SPD pushed for the legislation to be approved by the outgoing parliament, fearing it could be blocked by a larger contingent of far-right and far-left lawmakers in the next Bundestag, which convenes on March 25.
Friedrich Merz, a leading figure in the CDU, has defended the accelerated timeline by citing the rapidly evolving geopolitical situation.
