The struggle for the billions in arms

After the federal election, a maneuver that is quite a challenge is being discussed in Berlin's government district. Should the old Bundestag quickly approve a new special fund for defense because the centrist parties no longer have a two-thirds majority in the newly elected Bundestag? It is well known that the Greens could warm to this - if there was also more money for infrastructure and social services. But the fact that CDU leader Friedrich Merz also appeared open to sounding out a change to the constitution with the SPD, Greens and FDP on the day after the election surprised some people. The debate picked up speed on Tuesday.

Suddenly, many things seem possible. Refilling the existing special fund for the Bundeswehr , possibly accompanied by another special credit pot for infrastructure. Or even an exception to the debt brake for defense spending. The background to this is the composition of the new parliament: AfD and the Left Party will be so strongly represented that the centrist parties will no longer have a two-thirds majority for a change to the Basic Law. The new Bundestag must convene for its constituent session no later than 30 days after the election. The window for changing the constitution closes on March 24th.

Large sums are involved. The first special fund for the Bundeswehr, approved in 2022 after the Russian attack on Ukraine, has a volume of 100 billion euros and expires in 2027. "If a new special fund is created, then it will certainly be parallel to the old one, because it is far too small," says Moritz Schularick, President of the Kiel Institute for the World Economy. "In terms of size, we are talking about 300 to 400 billion euros. We must be able to spend up to 150 billion a year on defense in the next few years," he says. By way of comparison: Currently, just over 50 billion euros are planned for this in the regular budget, and from 2028 onwards, according to earlier plans, this should rise to 80 billion euros. Schularick believes that an exemption for defense investments from the debt brake would be better than a new special fund. In any case, one should not make oneself dependent on extreme parties. "Deterrence works through the ability to act." The dimensions mentioned are necessary so that Europe can continue to live in peace and prosperity.

A new special fund with the old Bundestag majority - what sounds questionable to many observers is something lawyers take a relaxed view of. "The Bundestag is fully capable of acting until its last session, so it can still pass laws even after the Bundestag election. This includes constitutional amendments," says Heidelberg constitutional lawyer Hanno Kube. From a purely legal perspective, the establishment of a special fund and even a reform of the debt brake are still possible. For Kube, this is a purely political question. He only raises the question of whether appropriate regulations can be issued in such a short period of time. This applies above all to a reform of the debt brake, which is demanding. "But a new special fund would also have to be designed intelligently to ensure that funds are used efficiently."

Merz's move has surprised not only political observers, but also his own parliamentary group. The party had been considering the possibility of creating new special funds without formally questioning the debt brake for some time. But the party actually wanted to take this path "rested" together with a two-thirds majority in the new Bundestag. The fact that this solution is now blocked "was something we did not have on our radar," said self-critical Union circles on Tuesday. The comments by Thorsten Frei, the parliamentary manager, only provided limited clarity. He was skeptical about a reform of the debt brake, but also said that "in view of the highly dynamic changes in foreign policy and the potentially increasing threat to our country, decisions very specifically in the area of ​​foreign and security policy could become necessary very quickly."

Leading Greens are also astonished - about the Union. "The CDU currently seems extremely disorganized," says co-leader of the parliamentary group Katharina Dröge. "The Union would have had the chance in recent years to reform the debt brake with the Greens and SPD. Friedrich Merz has repeatedly rejected this for tactical reasons - despite all the warnings." The Greens have long been calling for a reform of the debt brake, but not just for higher defense spending. "We need a reform of the debt brake that goes beyond investments in peacekeeping," says Felix Banaszak, co-leader of the party. "It is also about investments in the dilapidated infrastructure and in cohesion in our society." He specifically mentions "good daycare centers and schools" and "sensible and fair climate protection." This is reminiscent of the "Germany Fund" for various state investments that was in the Greens' election manifesto.

For the Union's budget politicians, it is clear that support for Ukraine and growing defense spending cannot be financed from the regular budget in the current economic weakness, especially if the USA withdraws its protective hand from Europe. The situation is "really dramatic," it was said on Tuesday. However, it is important to avoid giving in to the SPD and Greens' request to weaken the debt brake itself, because that would open the door to "arbitrary spending."

In order to win over the SPD and the Greens, it is conceivable that the Union will offer them additional special funds for infrastructure. Each of the two pots could then be endowed with 100 billion euros, it is said. The Union considers it constitutionally permissible, but in terms of political culture unfortunate, to use the defeated Bundestag for such far-reaching decisions. There are similar reservations in the FDP faction.

The Green politician Danyal Bayaz, Finance Minister of Baden-Württemberg, emphasized that after the speech by the American Vice President at the Munich Security Conference in mid-February at the latest, it had been clear that fiscal leeway needed to be created sooner rather than later. "The fact that this idea came to us less than 24 hours after the election does not exactly show strategic foresight," said Bayaz, referring to the CDU . Europe must take its defense into its own hands, and a new federal government must lead this process. "But that will only work if we invest around three percent of our economic output in our security and defense architecture on a permanent basis. EUR 100 billion will not be enough; we are talking more about two or three times that amount, depending on the period we are talking about and how our European partners position themselves." Given the situation, "unconventional paths" must now be taken.

His party colleague Sebastian Schäfer also speaks of "hundreds of billions of euros" being needed. "Setting up a special fund just for the Bundeswehr again is far too narrow-minded. Security means more than tanks, we are already being attacked in hybrid ways and we have to defend ourselves against them." Schäfer's suggestion is that "defense spending should generally not be taken into account when calculating the debt brake."

However, it will be difficult to convince the Union of such a path. North Rhine-Westphalia's Prime Minister Henrik Wüst (CDU) reiterated to the "Rheinische Post" the position that party leader Merz had also taken before the election: "The new federal government must first set priorities and scour the budget for savings potential." Then they can look at what is possible within the framework of the current debt brake and think about reforming it.

If the debates on a new special fund or a reform of the debt brake remain inconclusive by March 24, there is another option: declaring a budgetary emergency. The government majority in the Bundestag is sufficient for this. "It does not seem impossible from the outset to classify the new US president's policies with regard to Europe and Russia as an exogenous shock that has significant budgetary implications," says constitutional lawyer Kube. But defense, as a central state task, must essentially be financed from the regular budget. In addition, credit authorizations from an emergency must be used within the respective year. But Germany will need higher defense spending for a very long time.