ARI SHAPIRO, HOST:
As Europe questions whether it can still rely on the United States and the war in Ukraine rages to the East, Germany is planning to end years of fiscal prudence to beef up its meager military and kickstart its stagnant economy. But conservative leader Friedrich Merz, who is not yet chancellor, must clear a number of hurdles before he can start spending. Esme Nicholson reports.
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FRIEDRICH MERZ: (Speaking German).
ESME NICHOLSON, BYLINE: As lawmakers in the Bundestag jeered and gesticulated, chancellor-in-waiting Friedrich Merz defended his motion to free up defense spending from Germany's strict laws that constrain borrowing.
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MERZ: (Through interpreter) The hybrid war already being waged against us has escalated massively in the past few weeks. From drones flying over barracks to attacks on our infrastructure, the threat to our security is greater than ever. We must act now and without delay to increase our defense capabilities.
NICHOLSON: Merz also justified plans to borrow $550 billion to invest in the country's crumbling infrastructure on top of unlimited defense spending made urgent by the fear that the U.S. will no longer support Ukraine or protect Europe in NATO. It marks a fiscal policy U-turn for a country historically allergic to debt and signals just how rattled Berlin is by apparent chaos in the White House. It's also a bid to revive Germany's sluggish economy. Jens Suedekum is one of the economists who drew up the plan for Merz.
JENS SUEDEKUM: For a long time we'd run budget surpluses year after year. The German debt-to-GDP ratio is much lower than in the U.S. Now we have to invest and really quickly because the world around us has changed dramatically within the last weeks.
NICHOLSON: To reform the constitutionally enshrined limits on debt and start spending more, Merz needs a two-thirds majority. This is why he is pushing for a vote in the outgoing Bundestag before the newly elected lower house convenes later this month, when the far left and the far right will have enough seats to block it. Alice Weidel, cochair of the far-right Alternative for Germany, or AfD, accused Merz of playing dirty.
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ALICE WEIDEL: (Through interpreter) By attempting to box through this motion with the help of lawmakers who have been voted out shows your contempt for the will of the electorate and your disdain for democracy.
NICHOLSON: Merz's main concern, though, was the Green Party, whose lawmakers were driving a hard bargain in exchange for their vote. Liana Fix, from the Council on Foreign Relations, says Merz, who has never held a government post, is getting a crash course on political compromise.
LIANA FIX: The kind of political statecraft that you need to get everyone on board for this is something that Friedrich Merz has not a lot of experience with. In the past, he has often pursued an approach of my way or the highway.
NICHOLSON: Even if the motion passes and allows the future government to whip out the checkbook, some worry that red tape could get in the way, something Jens Suedekum has made clear to Merz.
SUEDEKUM: The crucial step is to make sure that all of this money turns into better roads, better bridges, better military equipment, more soldiers and eventually then also into more economic growth.
NICHOLSON: Liana Fix says Germany's armed forces are so chronically underfunded, they've forgotten how to spend money.
FIX: Now that Europeans have seen how quickly equipment from the United States can be turned off in Ukraine, there are concerns that it might be in the future risky to buy too much from the United States.
NICHOLSON: She says money spent on weapons made in Germany must be for things like drones, not the usual overly complex systems favored here that are obsolete by the time they hit the market.
For NPR News, I'm Esme Nicholson in Berlin.
(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.
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