Germany finally supports trillion-euro investment plan. This will unlock aid to Ukraine

The upper house of the German parliament (Bundesrat) has backed incoming German Chancellor Friedrich Merzʼs plan to invest billions in the countryʼs defense and infrastructure, totaling a trillion euros. This will unlock €3 million in aid to Ukraine.

This is reported by Bloomberg.

The Bundesrat, which represents 16 federal states, passed the bill on Friday, March 21, with 53 votes in favor — at least 46 votes were needed.

Earlier, at an emergency meeting on March 18, Merz received the support of 513 members of the lower house of parliament, the Bundestag, which is more than enough to change the German constitution. The bill proposes to loosen the debt limit rule.

Economists have estimated that the countryʼs military needs more than €400 billion in investment in the coming years. Merzʼs plan stipulates that spending on defense, intelligence and cybersecurity that exceeds 1% of GDP will be exempt from the debt rule.

According to the FT, representatives of the Christian Democratic Union of Germany want not only to accelerate rearmament, but also to create a 12-year special fund of €500 billion. The funds will be used to modernize hospitals, schools, roads and energy networks.

• The Christian Democratic Union, led by Friedrich Merz, won the German election on February 23. They will need to form a coalition with another party to have a majority of votes and the ability to form a government.
• During the full-scale invasion, Merz visited Ukraine several times and met with Volodymyr Zelensky. He supports both humanitarian and military aid, but is not ready to talk about security guarantees or German peacekeepers. Unlike the Scholz government, Merz wants to allow the delivery of Taurus cruise missiles to Ukraine.

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