Shortly after the election, the Christian Democrats (CDU) gleefully announced their plan for a debt bonanza, along with their new Social Democrat (SPD) partners. A total of €1 trillion would be spent on weapons and infrastructure, all Germany needed to do was suspend its “debt brake” to make it happen.
Now, the whole plan is coming under threat. The Greens have signaled they won’t back the black-red trillion-euro debt plan, at least not without some serious investment in climate infrastructure and funds for foreign nations. The CDU has signaled they want to accommodate the Greens’ requests, but even if that happens, there are other serious roadblocks ahead, including a vote in the Bundesrat, which is made up of the 16 state governments in Germany.
In addition, the March 23 deadline is rapidly approaching. After that date, the new Bundestag forms, the German parliament, and due to the new composition of parties, the votes will no longer be in place to overcome the required two-thirds majority to rewrite the German constitution.
The Greens are going to drive a hard bargain, as they hold all the cards. The liberal Free Democrats (FDP) have already signaled they will not vote for lifting the debt brake, and the Alternative for Germany (AfD) and The Left Party have also ruled out such a move. That means the CDU and SPD only have the Greens or they have nothing.
In many ways, the Greens have little incentive to go along with the package. The CDU blocked lifting the debt brake while they were in power, which contributed to the collapse of the previous government. There is also no offer for the Greens to join the new government ruling coalition either.
In addition, the sister party of the CDU, the CSU, bashed the Greens relentlessly during the election. Now, the Greens are supposed to hand the CDU and SPD a nearly blank check to spend hundreds of billions on projects not especially close to the Greens’ policy goals.
Negotiations are ongoing, and it appears the Greens may accept a compromise, as long as the CDU throws them enough money. However, there will be voices in the party who remain resistant to such a deal, as it will give the CDU and SPD an enormous advantage politically.
The Bundesrat could also spell doom for the debt plans. In the east, the FDP, the Left Party, and the BSW have all shot down the plan, along with the Greens. Even in Bavaria, the CSU’s Markus Söder has not been able to convince his smaller coalition partner, the Free Voters, to back the plan.
If a state government cannot agree in the Bundesrat, then it is required by law to abstain from voting, which is counted as a “no” vote. So far, the CDU and the SPD have only secured the votes from four states, Hesse, Saarland, Saxony, and Berlin, where they also happen to govern. They also need a two-thirds majority in the Bundesrat to ensure their plan goes through.
Green Party officials in the states are also skeptical.
“Without taking important corrections into account, we do not consider the law to be acceptable. Due to the urgency of the situation, negotiations need to be held quickly, taking into account the concerns and worries of the states,” read a joint statement by NRW Deputy Prime Minister Mona Neubaur, Baden-Württemberg Finance Minister Danyal Bayaz, and Björn Feckers, the Mayor and Senator for Finance in Bremen.
If the debt deal falls through, the CDU and SPD will be facing a potentially precarious situation. If they want to spend, they will have to cut. Then, things will get messy. Migration alone is costing between €50 billion and up to €75 billion a year depending on how it’s calculated, however, both parties have few solutions on how to bring down those costs. NGOs are raking in billions, but the SPD will fight tooth and nail to ensure the funds keep flowing. These battles could play out in all sorts of ways and eventually doom the new ruling government. That trillion in debt is supposed to be there to soothe over the differences, and without all the sugar rush a trillion euros brings, the honeymoon for the CDU and SPD may be over faster than anyone expects.
