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On Sunday, Germany’s leading candidate for the upcoming election, Friedrich Merz, signaled his willingness to reconsider the country’s stringent borrowing regulations as he faced scrutiny over how he plans to fund increased defense spending.
During a televised debate ahead of the February 23 parliamentary election, the Christian Democrat (CDU) leader admitted that Germany’s constitutional “debt brake” might need re-evaluation. He mentioned that defense expenditures in Europe’s largest economy are likely to move toward 3 percent of GDP, responding to pressures from US President Donald Trump.
In response to Chancellor Olaf Scholz’s remark that it was “ridiculous” to think spending cuts and economic growth alone could generate the vast sums required for a bigger defense budget, Merz opened the door to amending the constitutional cap, which limits Germany’s structural deficit to 0.35 percent of GDP.
Merz stated, “As I’ve always pointed out, this is something that can be discussed, but not immediately. Our initial focus should be on potential savings, economic growth, and the crucial budget reallocations.”
The CDU, known for its fiscal conservatism, pledges to uphold the debt brake with its manifesto declaring that “today’s debts are tomorrow’s tax increases.” However, some prominent economists criticize the brake as an outdated fiscal constraint that poses challenges to necessary infrastructure investments and meeting Trump’s demands for larger financial contributions to Western defense.
Merz emphasized Germany’s initial commitment to consistently allocating 2 percent of GDP to defense but anticipated this figure might rise closer to 3 percent, still far from Trump’s proposed 5 percent.
Olaf Scholz, with his Social Democrats (SPD) ranking third in opinion polls, found himself frequently defending his stance during the intense 90-minute debate.
The first segment of the debate delved into migration policy, sparked by a recent knife attack by a mentally ill asylum seeker, resulting in the tragic deaths of a two-year-old and a passer-by.
With the CDU enjoying around 30 percent voter support, Scholz criticized Merz for seeking backing from the far-right Alternative for Germany (AfD) to pass a migration motion in parliament, marking a first in Germany’s postwar history to achieve a majority with far-right support. Merz firmly excluded any coalition with the AfD, stating, “That’s out of the question.”
Addressing the consequent protests across Germany against his parliamentary maneuver, Merz noted support from other voters, observing, “Polls are rising.” He pointed out a slight increase in CDU’s latest survey numbers. “It can’t have been all wrong, even if I’d prefer it didn’t happen.”
However, he mentioned the difficulty in securing support from the SPD or Green party for the migration measure.
Scholz highlighted the enforcement of stricter border controls and a significant increase in deportations of illegal migrants, following a fatal knife attack by a Syrian national in Solingen.
Merz acknowledged the coalition’s efforts, albeit minimal, prompting Scholz’s sarcastic response, “Thank you, that’s very generous.”
Shifting the blame for rising energy prices and inflation to Russian President Vladimir Putin’s 2022 invasion of Ukraine, Scholz countered Merz’s charges, stating, “We attempted to offer help.”
Merz questioned why Scholz shuttered Germany’s last three nuclear power plants in 2023 amid an energy crisis, describing the Chancellor’s denial of deindustrialization during a significant manufacturing sector downturn as “astonishing.”
Scholz painted Merz as a perilous advocate of free-market policies, accusing him of intending to privatize Deutsche Bahn by separating train operations from the track network. He warned, “That would end disastrously, just like in England, where nothing works anymore, and you’re left with rundown tracks and poor train services.”
