Germany’s parliament has approved a historic easing of the country’s debt limit to boost defense spending and spare €500 billion ($547 billion) for infrastructure and measures to combat climate change.
The vote in the Bundestag, considered a crucial test for Germany's likely next chancellor Friedrich Merz, was 512 to 206.
The parties backing the measure, which include Merz's Christian Democratic Union (CDU) and its Bavarian sister party, the Christian Social Union (CSU), the Social Democrats and the Greens, had to gather a two-thirds majority, or 489 votes, for the legislation to pass.
The relaxation of Germany's strict constitutional restriction on government borrowing, known as the debt brake, will allow the uptake of unlimited credit to fund defense expenditure, civil protection, the intelligence services and cybersecurity.
It represents a massive about-face for CDU leader Merz, who had previously railed against deficit spending. It also hands the conservative leader a huge boost, giving the chancellor-in-waiting a windfall of hundreds of billions of euros to ramp up investment after two years of contraction in Europe's largest economy.
But Russia's war against Ukraine and Washington's increasingly antagonistic stance towards Europe are forcing Germany, and its European allies, to reckon with its massive dependence on the United States for its defense.
The package will also release €3 billion in additional aid for Ukraine.
The €500 billion fund for infrastructure investments includes €100 billion for climate change policies - a condition set by the Greens to support the measures.
The measure now passes to the Bundesrat, or upper house, consisting of the premiers of Germany's 16 states. There it must also achieve a two-thirds majority.
