Ever since the Berlin Wall fell and the country reunited, the world could count on Germany to keep budget deficits relatively low, military spending even lower, and politics at a plodding pace.
The next German government is smashing all those traditions before it even takes office.
Friedrich Merz, the leader of the center-right Christian Democrats and the man almost certain to be Germany’s next chancellor, and leaders of his likely coalition partners, the center-left Social Democrats, said on Tuesday that they had agreed to relax limitations on German borrowing to increase military and infrastructure spending by hundreds of billions of dollars.
The agreement, which is subject to approval in Parliament, is a rapid-fire attempt to counter fears that stalk mainstream German political parties: a surge in the far right domestically, an aggressive Russia on Europe’s doorstep, and the abrupt withdrawal of America’s guarantees for German security.
The deal also represents a first step toward an aggressive early agenda for Mr. Merz that breaks with his more fiscally conservative campaign promises — but that aspires to show voters that the centrist coalitions that have long governed Germany can shed a culture of political sluggishness at an urgent moment.
Its centerpiece is a pair of measures meant to circumvent Germany’s limits on federal borrowing, known as the “debt brake,” which have proved an obstacle to its attempts to beef up its military and to spark growth in a stagnant economy.
“In view of the threat to our freedom and to peace on our continent, the mantra for our defense has to be, ‘whatever it takes,’” Mr. Merz said in a Tuesday evening news conference.
The question of whether mainstream parties can quickly come together to bolster defense, stoke economic growth and address voter worried about immigration could be a defining one for the years ahead, both in Germany and throughout Europe.
Mainstream parties across the content increasingly view Mr. Trump’s rapid foreign policy shifts and the rise of the far right as existential threats, which will require them to act boldly to solve large and difficult problems at home and abroad.
Political leaders and outside analysts increasingly say Europe will be vulnerable to aggressor nations like Russia if it does not quickly increase military spending and rebuild its capacities to produce weapons of war, given Mr. Trump’s threats to pull back America’s longstanding security blanket for Europe.
They warn that many hard-right parties making inroads with European voters aim to undercut democratic institutions, like independent media, and that if given power, they would seek to reshape governance along more authoritarian lines, in the mold of Prime Minister Viktor Orban in Hungary.
Many analysts also say voters are turning to those parties, in part, out of frustration with the slow pace of change — especially in Berlin.
“Germany’s federal structure rewards delay and least-common-denominator politics,” said Andrew B. Denison, the director of Transatlantic Networks, a foreign policy consultancy based in Königswinter, Germany. “Everyone has leverage to protect their vested interests, no one wants to be liable if something goes wrong.”
Among voters, he added, “there is a reason for frustration, and the more intractable the problems, the more attractive the radical solutions.”
However, several ideas on the table in Germany’s coalition talks would appear to be radical by the standards of Europe’s largest economy, including the ones agreed to by the Christian Democrats and the Social Democrats on Tuesday. They include:
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Spending hundreds of billions of euros to crank up German military readiness, to help rebuild a defense capacity that has long been outsourced to the United States.
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Spending more than $500 billion over the next decade to help industry and to modernize domestic infrastructure, potentially including a federal records system that still relies heavily on physical paper and a national rail system that struggles to keep its trains running on time. Mr. Merz said that such spending would help to revitalize a German economy that shrank slightly last year.
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Relaxing the debt brake, so all that money can be spent without cutting social benefits. Mr. Merz said the parties would propose a motion that exempted military spending in excess of 1 percent of gross domestic product from the debt limitations.
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Doing all of that in a lame duck session of Parliament, likely next week, before Mr. Merz officially takes over as chancellor.
Mr. Merz did not promise anything that aggressive in the parliamentary campaign. He stressed deregulation and tax cuts to stoke growth, and a series of measures to tighten border security and limit migration. He entertained calls to relax the borrowing limit to fund military spending, but said he would rather find the money by cutting other government spending.
Late in the campaign, though, two events seemed to light a fire under Mr. Merz.
In January, an asylum seeker from Afghanistan with mental health issues killed a toddler and an adult in a Bavarian park, one of a string of attacks by immigrants over the past year. Mr. Merz immediately pushed a series of migration restrictions in Parliament, even though he knew the bills could pass only with the support of the far-right Alternative for Germany, or AfD. That move broke a decades-long taboo in German politics against working with parties labeled extreme to pass bills.
The bigger development was Mr. Trump’s inauguration. It was quickly followed by administration threats to withdraw troops from Germany, an embrace of Russia in talks over ending the war in Ukraine and an admonition by Vice President JD Vance that Europeans must allow parties like the AfD into government.
Mr. Merz denounced the moves and openly questioned whether America would remain a democracy. He began treating Mr. Trump as a catalyst for efforts to borrow money and spend more on defense.
The deal Mr. Merz and the Social Democrats announced on Tuesday amounts to a sort of grand bargain, agreeing to more borrowing for defense — Mr. Merz’s big priority — coupled with more borrowing for domestic measures like infrastructure — the priorities of the center left. It’s a much larger version of the sort of deal that President Barack Obama cut with Republican congressional leaders a decade ago, for a slight relaxation in spending caps to give each side something it wanted.
In Parliament, a supermajority vote is necessary to relax the debt brake. Even then, rival parties like Die Linke, which opposes increased military spending, have threatened to sue to block the change.
Undaunted, Mr. Merz said the Christian Democrats and Social Democrats would continue to negotiate over reducing certain government welfare payments, limiting crime and restricting immigration.
“We are aware of the scale of the tasks ahead of us,” he said.
