Germany's Bundesrat, the upper house of parliament, is set to vote on a package aimed at revitalizing growth in Europe’s largest economy and enhancing military capabilities for a new era of collective defense.
This vote represents the final significant hurdle for the package before it can be signed into law, unlocking billions of euros into an economy that has contracted for two consecutive years.
Earlier this week, the package passed the Bundestag, the lower house, after its proponents—conservatives and the Social Democrats (SPD)—secured the support of the Greens for a two-thirds majority. It is widely expected to receive approval in the Bundesrat.
The package proposes the creation of a 500 billion euro ($546 billion) fund for infrastructure spending over twelve years and seeks to amend constitutionally enshrined borrowing rules, known as the debt brake, to facilitate increased defense spending.
As the conservatives and SPD engage in coalition discussions, they are keen to push this package through the outgoing parliament due to concerns that it may be hindered by an expanded contingent of far-left and far-right lawmakers in the next Bundestag.
The chancellor-elect has emphasized the urgency of the timetable in light of the rapidly evolving geopolitical landscape, particularly shifts in U.S. policy under President Trump, which European leaders worry could leave the continent vulnerable to a more aggressive Russia and assertive China.
If the legislation passes the Bundesrat, it would signal a significant victory for Merz before he is officially sworn in as chancellor. The 69-year-old, whose conservatives won last month's election, aims to finalize coalition talks with the SPD by Easter.