The parties likely to form Germany's next government today doubled their proposed climate action share to €100bn to reach an agreement with the Green party to secure the passing of their debt-financed defence and infrastructure package.
The right-of-centre CDU/CSU, centre-left SPD and Green parties today announced that the latter had agreed to the former's budget proposals, paving the way for a successful vote in the lower house of parliament on 18 March.
The prospective coalition parties for Germany's next government following last month's federal elections need the Green party for a vote on three changes to the federal constitution, which now appears certain to be won, barring protest votes by too many CDU/CSU deputies or absences.
In addition to the proposed €500bn special fund for infrastructure, the coalition parties propose to exempt defence spending from the constitutionally enshrined debt brake, and to lift the debt limits on federal states.
The CDU/CSU and SPD had yesterday offered the Greens an allocation of "up to" €50bn from the infrastructure fund to the climate and transformation fund KTF.
According to the final agreement, the infrastructure fund will be valid for 12 years instead of 10 as originally planned. This is equivalent to some €41.6bn/yr, of which €33bn will be allocated to the federal government and the remainder to the federal states. A limit of 10pc of the federal budget will apply, with the federal ministry to clarify the details. The infrastructure fund bill stipulates funding be made available only for "additional" tasks.
Outgoing economy minister Robert Habeck said in Berlin before the agreement was announced that the Greens would not accept the possibility, under the infrastructure fund, of incurring debt only to be able to then cut taxes.
Habeck noted the "irony" of the fact that the transport sector's dismal performance in cutting emissions, owing in part to last year's sharp drop in electric vehicle (EV) sales, can be partly attributed to the same CDU/CSU that is now proposing EV buyer's premiums and a huge increase to the KTF. The CDU/CSU in 2023 sued the outgoing government over its attempt to transfer remaining money earmarked for fighting the Covid-19 pandemic into the KTF. The constitutional court's ruling in November 2023 against this transfer of about €60bn threw the government's climate and spending plans into disarray, leading among other things to a swift axing of Germany's EV buyer's premium.
