Germany’s Bundestag on Tuesday approved a significant fiscal package that includes revisions to long-standing debt policies, allowing for increased defense spending and the establishment of a 500 billion euro ($548 billion) infrastructure and climate fund.
The decision passed with 513 votes in favor and 207 against. The Bundesrat is scheduled to vote on the measure this Friday.
Germany made this move despite its traditionally cautious approach to debt amid increasing uncertainty over U.S. commitment to NATO.
Incoming Chancellor Friedrich Merz called the vote a turning point. “This is the first major step toward a new European defense community,” he said, citing growing security concerns in Europe.
President Donald Trump previously urged NATO members to increase defense spending to 5% of GDP—more than double the current 2% target—warning that the U.S. could withdraw from the alliance if they fail to comply. He also stated that he would “encourage” Russia to attack NATO members that do not meet their obligations.
Recently, U.S. Defense Secretary Pete Hegseth emphasized that European nations should also assume a greater share of funding for Ukraine.
European Commission President Ursula von der Leyen called Bundestag’s decision “excellent news.”
Speaking at a press conference with Danish Prime Minister Mette Frederiksen, she stated that the vote “sends a clear message to Europe that Germany is committed to making significant investments in defense.”
Frederiksen meanwhile called it “fantastic for all Europeans.”
Germany’s move aligns with broader European efforts to boost military spending. The EU Commission is preparing €150 billion ($164 billion) in loans to support a total of €800 billion ($873 billion) in military investments across member states.
