Her move Germany release hundreds of billions of euros to defensive costs And additional debt infrastructures passed the last legislative obstacle on Friday (21.03.2025), when MPs in the upper parliament in Berlin approved the measures.
It is recalled that the amendments to the German Constitution voted by the Federal Parliament on Tuesday (18.3.2025) also required a two -thirds majority in the Bundesrat to enter into force. The bill passed 53 votes in favor, more than the required two-thirds of 46 and paves the way to President Frank-Walter Steinmeier to sign it and submit it to the Government Gazette. Amendments to the Constitution predict partial relaxation of the debt brake: Expenditure on defense, civil protection and intelligence services exceeding a certain level will no longer be taken into account in the rule of the Debt Constitution.
This also applies to military assistance for attacking states, such as Ukraine. So far, these exceptions have only been the case for natural disasters and emergencies.
For these duties, Expenditure up to 1% of the nominal gross domestic product (ed. Instead of 0.35% provided by the existing Constitution) must be funded through the budget. If higher costs are required, they could be covered by new debt after amending the Constitution.
Debt brake relaxations are also designed for the Federal Lands. Hereof They will be allowed to take on a total debt of 0.35% of GDP in the future.
Infrastructure Investments
The amendment of the Constitution also provides for the creation of a special fund totaling EUR 500 billion for a period of 12 years.
These funds will be used exclusively for additional infrastructure investments and to achieve climate neutrality by 2045.
The Special Fund has no impact on the debt brake. Federal states can use the Special Fund to invest 100 billion euros in their infrastructure. Another 100 billion euros will also enter the climate and transformation fund.
Increased defensive readiness
The Russian aggressive war on Ukraine, which has already lasted three years, has dramatically changed the security situation in Europe, according to the justification for the amendment of the Constitution, a Bundesrat note said. Nor The taking of the duties of the new US government would expect that existing tensions in international politics would be reduced.
The future federal government will face the challenge of the significant reinforcement of national defense potential and alliance capabilities.
Increased defense capabilities also require a developed, functional and modern infrastructure. This is also a key location factor that significantly affects competitiveness and economic growth.
Financial Needs of State and Municipalities
Finally, after the crises of recent years and in view of many new challenges, federal states and municipalities also have major financial needs that are independent of the current financial situation. These would come, for example, from ensuring a modern education system, digitizing the administration, integration of refugees and enhancing civil protection.