The parties in talks to form Germany's new government are weighing establishing two special funds potentially worth hundreds of billions of euros, one for defense and a second for infrastructure, three people with knowledge of the matter told Reuters on Sunday.
Economists advising the parties that will likely form a new government coalition estimate that around 400 billion euros ($415 billion) are needed for the defense fund and 400 billion to 500 billion euros for the infrastructure fund, the people said.
Friday's heated White House meeting between Ukrainian President Volodymyr Zelenskyy and U.S. President Donald Trump increased a sense of urgency in Berlin to act faster on spending for Germany's own defense and Ukraine, they said.
Senior figures from Germany's conservatives and Social Democrats began exploratory talks on Friday about forming a coalition government, hoping that Friedrich Merz, leader of the conservative bloc that came first in last week's election, would form a government by Easter.
But the hope is that the funds would be approved in March during the current Parliament before a new government is formed, the people said.
The two special funds are being discussed by three parties – the Christian Democrats (CDU), the Bavarian Christian Social Union (CSU) and the Social Democrats (SPD) of Chancellor Olaf Scholz – and they are working on details, the people said on the condition of anonymity.
No final decisions have been made yet, they added.
The parties declined to comment, citing the confidentiality of the talks.
