BERLIN, March 10 (Reuters) - Germany's Greens may decline to support likely next chancellor Friedrich Merz's proposal for a significant increase in state borrowing, as a party source cautioned on Monday that "approval is becoming less likely with each passing day."
The Greens' opposition to endorsing extensive debt reforms and a proposed 500 billion euro ($540 billion) infrastructure fund could thwart plans to stimulate growth in Europe's largest economy that gained momentum last week.
However, some within Merz's camp and his anticipated coalition partners view the Greens' position as a negotiation tactic to secure concessions.
Having won elections last month, Merz aims to loosen Germany's strict state borrowing limits to boost growth and modernize the military, citing concerns over a potential threat from Russia and uncertainty regarding the U.S.
For Merz and his probable coalition partner, the Social Democrats (SPD), the Greens' support is crucial to pass legislation in the current parliament. In the upcoming parliament starting on March 25, passing the measures could become more challenging due to an increased presence of far-right and radical left lawmakers who may impede progress.
The Greens are pushing for additional climate protection measures to be incorporated into Merz's plans and at the state level, they advocate for a larger allocation from the 500 billion fund to states, from the planned 100 billion to 200 billion.
"We are farther from securing approval today than we were in recent days," cautioned co-party leader Felix Banaszak on Saturday.
In a gesture to the Greens, Merz hinted at potential concessions for climate preservation on Sunday.
Amid the discussions on forming a coalition between Merz's conservatives and the SPD, officials noted that the Greens are working to strengthen their bargaining position.
"Ultimately, however, they are expected to agree due to political accountability, given their prior advocacy for such a special fund," remarked one of the negotiators to Reuters.
Bremen's mayor, Andreas Bovenschulte of the SPD, downplayed the Green's resistance, stating, "It is evident that the Greens have their own agenda for the upcoming talks," and added, "I interpret this to mean that the Greens aim to contribute constructively and swiftly arrive at a feasible solution."
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