Germany’s parliament gives final approval to landmark spending package

Friedrich Merz’s plan to ramp up defense and infrastructure spending cleared its final parliamentary hurdle Friday, in a boost for Germany’s chancellor-in-waiting and Europe’s rearmament efforts.

The upper house of the Bundestag voted overwhelmingly in favor of the reforms proposed by Merz, whose center-right party won last month’s general election. Their approval disrupts decades of fiscal conservatism in Germany by loosening the legal limit on government borrowing.

Merz had been under pressure to get the deal passed before the end of the month, when Germany’s new parliament convenes: The far-right Alternative for Germany and the far-left Die Linke — both of which oppose military aid to Ukraine — jointly secured the one third of seats necessary to block the proposal in the February elections.

Merz “has shown he can deliver” by “pulling together a complex ad hoc coalition with parties he was until very recently in opposition with,” a German academic told the Financial Times. But his emphasis on the need for “structural reforms” could complicate coalition talks with the center-left Social Democrats, the paper noted.