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(Bloomberg) — German lawmakers will vote on a bill Tuesday that would unlock hundreds of billions of euros in debt-financed defense and infrastructure spending and herald a pivot toward a substantially more expansive fiscal policy in Europe’s biggest economy.
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Conservative Chancellor-in-waiting Friedrich Merz and the Social Democrats last week sealed an agreement with the Greens that should secure the two-thirds majority needed for the law to pass the lower house of parliament, or Bundestag, barring any last-minute surprises.
That would pave the way for the Bundesrat upper house, where Germany’s 16 federal states are represented, to give its backing to the bill at a session on Friday, after which President Frank-Walter Steinmeier can sign it into law.
Merz’s CDU/CSU bloc and the SPD, who are in talks to form the next government, are seeking authorization to massively ramp up spending in response to the geopolitical upheaval triggered by Donald Trump’s return to the US presidency, and to give a much—needed boost to Germany’s stagnating economy.
What’s happening today?
The Bundestag session is due to begin at 10 a.m. local time and end at 1:30 p.m. A lengthy list of lawmakers from each party will address the chamber before a roll-call ballot at the end of the debate.
There’s relatively little margin for error, although party leaders sounded confident after lawmakers gathered in Berlin Monday evening.
Combined, the CDU/CSU bloc, SPD and Greens have 520 seats — 31 more than the 489 needed for the necessary supermajority required for changes to the country’s constitution. Non-binding tests on Tuesday morning before the debate are meant to head off a surprise when the votes are officially cast.
The ballot typically takes about 20 minutes and there will then be a break of around 10 minutes before the speaker announces the result. Depending on the number of unscheduled interventions, the timing of the vote could slip well into the afternoon.
What’s in the bill?
Spending on defense and security in excess of 1% of gross domestic product, or roughly €45 billion ($49 billion), will be released from borrowing restrictions written into Germany’s constitution — the so-called debt brake. That effectively means spending beyond 1% of GDP has no upper limit.
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