Germany’s Greens may refuse to back plans by likely next chancellor Friedrich Merz for a massive increase in state borrowing with a party source, on March 10, warning “approval is becoming less likely with each passing day”.
The Greens’ refusal to back sweeping debt reforms and a special €500 billion infrastructure fund would derail a borrowing bonanza that had excited markets last week on hopes of reviving growth in Europe’s largest economy.
However, several voices in the camp of Merz and his likely coalition partners have played down the stance by the Greens as a negotiating tactic to extract concessions.
After winning elections last month, Merz wants to unshackle Germany’s tight state borrowing limits to fund growth and revamp the military, warning that a hostile Russia and an unreliable US could leave Europe exposed.
But Merz and his likely coalition ally, the Social Democrats (SPD), need support for the Greens to pass measures in the outgoing parliament.
In the new parliament that begins on March 25, the measures could get even harder to pass, with an enlarged contingent of far-right and radical left lawmakers threatening to block them.
The Greens want more measures for climate protection included in Merz’s plans, and at the state level, they have called for a greater slice of the money from the €500 billion fund to go to states, to €200 billion from the planned €100 billion.
“We are further away from an approval today than in the last few days,” co-party leader Felix Banaszak had warned on March 8.
In a nod to the Greens, Merz on March 9 hinted at concessions for climate protection.
Officials in the camp of Merz’s conservatives and the SPD, who concluded preliminary talks towards a coalition on Saturday, said the Greens wanted to build up their negotiating position.
“In the end, however, they will agree out of a sense of political responsibility because they themselves have always called for such a special fund,” one of the negotiators told Reuters.
Bremen’s mayor Andreas Bovenschulte from the SPD also played down the threat from the Greens.
“It is quite clear that the Greens also have their own ideas for the upcoming talks,” he told Reuters. “I read this more as meaning that the Greens want to contribute constructively and quickly reach a viable result now.”
Germany’s outgoing Chancellor Olaf Scholz has called for reform of the country’s “debt brake” to strengthen the country’s defence capabilities. https://t.co/qYMpKo2GwI
— Brussels Signal (@brusselssignal) February 14, 2025
