Germany’s Greens make Merz sweat over massive spending plan

BERLIN — Friedrich Merz’s historic spending plan for Germany hinges on the cooperation of a party many of his conservatives have often derided.

It’s the Greens — the defeated, center-left party that came in fourth place in the Feb. 23 election — that hold the power to foil the election winner’s grand plans. And the party seems intent on either stopping Merz in what would be a stunning act of political retribution — or, as is more likely, using their new and unexpected leverage to force the conservative leader to accede to many of the Green policies he’s long railed against.

On Monday, Green leaders upped the ante, vowing to reject the paradigm-shifting deal Merz and his conservative alliance struck with the center-left Social Democratic Party (SPD) to potentially unleash one trillion euros of new spending to bolster the military and invest heavily in the economy. 

If Merz and the SPD “think that, because of the security threat posed by [Vladimir] Putin in the Kremlin — and, honestly, also Donald Trump in the White House — we will simply have to go along with this, then we reject that outright,” one of the Greens leaders, Felix Banaszak, said on Monday in Berlin.

Should the Greens follow through on their repudiation of Merz’s plan, the decision would mark a stunning defeat for the chancellor-in-waiting just days after he announced a dramatic shift in German policy to embrace debt-fueled spending after many years of self-imposed austerity. More concretely, Merz and the SPD want to effectively exempt defense spending from the country’s constitutional debt brake, loosen borrowing rules for the country’s 16 states, and create a €500 billion infrastructure fund.

Merz’s sense of urgency stems from the fact that he has no more than two weeks to push the package through the current parliament. If he fails, it will be even harder for him to get the votes he needs. When the newly elected Bundestag convenes by March 25 at the latest, the far-right, pro-Kremlin Alternative for Germany (AfD) party and The Left party, which opposes military spending, will have the strength to block the spending package.

That means Merz is now dependent on the Greens, a party he often belittled ahead of the election, once vowing to pursue policies “for the majority of the population — those who think rationally and have all their marbles — not for some green and left-wing lunatics.”

The Greens are now not particularly eager to make things easy for Merz.

Greens’ demands

In particular, the Greens are demanding that Merz’s planned infrastructure fund be used for investments to speed Germany’s clean energy transition, even though Merz, ahead of the election, vowed to deprioritize climate policies. They also want a more expansive view of which defense expenditures could be exempted from the strictures of Germany’s debt brake, including military aid to Ukraine.

Instead of throwing their support behind Merz’s plan for reforming the debt brake, the Greens have conceived their own draft law. Seen by POLITICO, the draft calls for defense and security spending above 1.5 percent of gross domestic product to be exempted from the restrictions of the debt brake. While Merz’s plan calls for spending above 1 percent of GDP to be exempted, the Greens’ draft sees defense spending as a far broader area, also constituting costs for intelligence services, foreign aid and counteracting cyber threats.

Greens leaders in Berlin on Monday also criticized the conservative-SPD deal as lacking seriousness and “real” proposals for investment.

“Who would have thought that we, as Greens, would ever have to push back against a proposal that uses debt not for investment, but to create fiscal space for other projects that have nothing to do with the future?” party co-chief Banaszak said.

Other Greens’ leaders echoed that criticism.

“Anyone who wants us to agree to more investment must also show that it is really about more investment in climate protection, more investment in the economy in this country,” said Katharina Dröge, co-chair of the Greens parliamentary group.

‘Responsibility for what won’t happen’

Behind the scenes, many of the Greens’ gripes with Merz and the SPD are personal. While the conservatives and SPD have been in intensive talks over the future of their likely coalition government, many Greens politicians are frustrated that they have been, until now, left out of the negotiations on the massive spending deal. Many Greens politicians believe that they’re being presented with Merz’s plan as if it were a fait accompli, according to multiple people within the party.

While the Greens’ strong rejection of Merz’s plan on Monday appeared to take many conservative and SPD leaders by surprise, they also continued to express optimism that they could reach an agreement with the Greens within days. The parliamentary leaders of the Greens were set to meet with Merz and SPD co-leader Lars Klingbeil on Monday evening to try to hash out the outlines of an agreement.

“The top priority for me and Friedrich Merz in the coming days is that we achieve something together and I am not giving up the confidence that we can succeed,” Klingbeil told reporters on Monday.

Because Merz’s deal with the SPD is made up out of three separate constitutional amendments — and thus three separate votes — it’s possible that only parts of the deal eventually make it through parliament. That, however, is something the conservatives and SPD want to avoid. 

In the end, the promise of massive investment for defense and infrastructure — policies the Greens have long pushed for — may well prove too attractive for the Greens to reject the package outright.

While the Greens are using their leverage to force Merz to make concessions, conservative lawmakers are also pressuring the Greens, arguing that failure to act now would damage Germany at one of the most sensitive moments in the country’s postwar history, with the transatlantic relationship on the rocks and Russian forces slowly gaining ground in Ukraine.

“Anyone who considers not agreeing also bears responsibility for what won’t happen,” Thomas Silberhorn, a conservative lawmaker told POLITICO. “We clearly expect the Greens to assume their political responsibility for the security of our country even if they are entering into opposition.”