Germany's upper house approves massive defense, infrastructure funding

BERLIN

Germany's upper house, the Bundesrat, approved constitutional changes on Friday that will enable major funding for defense and infrastructure.

The amendments, which had been previously approved by the lower house Bundestag, gained majority support with 12 federal states voting in favor and four states abstaining.

The federal states governed by the Christian Democrats and their prospective coalition partner, the Social Democrats, voted in favor of the changes, securing the required two-thirds majority in the Bundesrat.

Under these changes, Germany's strict fiscal rules will be eased, permitting borrowing for critical defense spending, strengthening intelligence services, protecting information technology systems, and aiding states attacked in violation of international law.

Expenditures in these categories exceeding 1% of the country’s GDP will be exempt from the constitutional “debt brake” rule. Previously, the country’s basic law capped government borrowing at 0.35% of GDP.

Another approved measure establishes a €500 billion ($542 billion) special fund for infrastructure investments and climate protection.

Of this amount, €100 billion ($108 billion) will be allocated to federal states for infrastructure investments, while another €100 billion ($108 billion) will be designated for climate protection.