BERLIN, March 18 (Reuters) - The outgoing German parliament approved a significant increase in government borrowing on Tuesday, along with a comprehensive revision of the country's debt regulations.

Chancellor-to-be Friedrich Merz's conservative party and the center-left Social Democrats, who are currently negotiating to form a government after last month's election, introduced a 500-billion-euro ($546 billion) fund for infrastructure and modifications to borrowing rules to fortify defense and stimulate growth in Europe's largest economy.

In order to secure the required two-thirds majority in parliament, they had to accommodate last-minute requests from the Greens party into their proposal.

The bill will now move to the Bundesrat upper house, representing Germany's 16 states, which is scheduled to vote on Friday.

High-ranking members of the conservative party and the Social Democrats anticipate the upper house's approval of the legislation.

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