‘Germany is back’: Merz secures Greens’ support for defence spend boost

Backing of Greens is tantamount to approval of chancellor-in-waiting’s proposal to relax debt brake

Germany’s conservative chancellor-in-waiting, Friedrich Merz, has said he has secured the support of the Green party for his radical plan to increase spending on defence and infrastructure after marathon talks that went through the night, paving the way for its approval in parliament.

“Germany is back,” Merz said in Berlin on Friday. “Germany is making its large contribution to the defence of freedom and peace in Europe.”

Continue reading...

Merz presses Greens to name their terms for German defence spending rise

‘What more do you want from us?’ asks chancellor-in-waiting as he seeks urgent support for fiscal rule changes

Germany’s chancellor-in-waiting has tried to win over the Greens to his ambitious but controversial plans to raise the country’s defence spending, promising to expand the scope of the plans and demanding of them: “What more do you actually want from us?”

The outgoing parliament met on Thursday to debate the creation of a €500bn (£420bn) fund for infrastructure investment and radical changes in Germany’s borrowing limits in order to boost defence spending.

Continue reading...

Germany to reach out to France and UK over sharing of nuclear weapons

But Friedrich Merz cautions such a move could not replace the US’s existing protective shield over Europe

Germany’s chancellor-to-be, Friedrich Merz, has said he will reach out to France and Britain to discuss the sharing of nuclear weapons, but cautioned that such a move could not be a replacement for the US’s existing protective shield over Europe.

“The sharing of nuclear weapons is an issue we need to talk about,” Merz said in a wide-ranging interview on Sunday with the broadcaster Deutschlandfunk (DLF). “We have to be stronger together in nuclear deterrence.”

Continue reading...

‘Military Keynesianism’? Reeves faces British defence dilemma after EU spending surge

Even Berlin and Brussels are bending fiscal rules in the face of Russia’s threat. Will the chancellor still stick to hers?

As the Nobel laureate Robert Lucas quipped during the 2008 financial crisis: “I guess everyone is a Keynesian in a foxhole.” Donald Trump’s upending of the postwar security consensus has underlined the enduring wisdom of Lucas’s observation. But now, instead of bank bailouts and emergency bond buying, European firepower is being directed at bombs, tanks and drones in the desperate fight to secure the continent’s border with Russia.

Berlin and Brussels – typically capitals of financial orthodoxy – have been convinced that this approach is required once again. Under the plan put forward by Germany’s chancellor-in-waiting, Friedrich Merz, Berlin is on the brink of relaxing its “debt brake” rule to pave the way for spending on defence and infrastructure worth an additional €1tn (£840bn) over the coming decade.

Continue reading...

American severance may be averted, but Europe’s leaders must fear the worst

Head-spinning speed of events leaves EU adapting at pace while trying to infer Trump’s possible geo-strategic aims

With a mixture of regret, laced with incredulity, European leaders gathered in Brussels to marshal their forces for a power struggle not with Russia, but with the US.

Even now, of course at the 11th hour, most of Europe hopes this coming battle of wills can be averted and the Trump administration can still be persuaded that forcing Ukraine to the negotiating table, disarmed and blinded, will not be the US’s long-term strategic interest.

Continue reading...

European markets soar as Germany moves to lift ‘debt brake’ and raise defence spending

Berlin’s ‘big bazooka’ proposal sends industrial stocks surging but fiscal sea change also hikes borrowing costs

European financial markets have rallied sharply and German borrowing costs have soared after the country’s prospective leaders announced a historic deal to loosen its “debt brake” rule to boost spending on defence.

The yield – in effect the interest rate – on 30-year German government bonds rose by about 25 basis points to 3.08% in its biggest daily increase since October 1998.

Continue reading...

Germany’s future coalition partners to relax debt rules to boost defence budget

Conservative alliance and Social Democrats to propose exempting spending of more than 1% of GDP on defence

The prospective partners in Germany’s next government have said they will seek to loosen rules on running up debt to allow for higher defence spending.

They said they will also seek to set up a huge €500bn ($533bn ) fund to finance spending on Germany’s infrastructure over the next 10 years.

Continue reading...

Merz’s all-male team photo revives question of gender equality in Germany

Image posted on social media rekindles idea that prospective new chancellor has a Frauenproblem

Six beaming election winners huddled around a table and not a woman among them: a viral social media image of the man likely to be Germany’s next chancellor and his transition team has revived longstanding questions about whether Friedrich Merz can bridge a persistent gender gap.

“Not great optics” was among the more generous of the thousands of comments on the post by Merz’s Bavarian ally Markus Söder, which seemed to hark back to another time.

Continue reading...

Germany election: Merz says it’s ‘five to midnight’ for Europe

Leader of victorious conservative alliance says continent must build defence capability as US moves towards ‘America alone’ motto

The man expected to be Germany’s next chancellor has said Europe must act swiftly to increase its defence capability in the face of a US administration whose motto is moving towards “America alone”, adding: “This is really five minutes to midnight for Europe.”

In a wide-ranging press conference after his conservative alliance’s victory in Sunday’s federal election, Friedrich Merz made it clear his focus was on the turbulent geopolitical landscape, saying that although he would seek good ties with the US he was also ready for “the worst-case scenario”.

Continue reading...

Monday briefing: Merz will be Germany’s chancellor – but extremists are waiting in the wings

In today’s newsletter: The far-right AfD may have come second, but at 20% they have been held off by the performance of mainstream parties, with the CDU leader Friedrich Merz on course to be the new chancellor

Good morning. Germany’s elections always matter far beyond the country’s borders – but yesterday’s vote could be the most important in a generation.

After decades as the stable linchpin of European liberal democracy, Germany has found itself sucked into the same crises that are erupting all over the continent – over its economy, attitudes to immigration and the war in Ukraine. And after the shocking interventions of JD Vance and Elon Musk in favour of the far-right Alternative für Deutschland (AfD) party, the election became a symbol of a wider struggle for ideological supremacy – and posed a serious question over whether the centre can hold across the continent.

Ukraine | Volodymyr Zelenskyy has said he is not willing to cave in to intense pressure from the Trump administration to sign a $500bn minerals deal – adding that that he was ready to quit as president if it meant “peace for Ukraine” or membership of Nato.

Catholicism | Pope Francis, who is battling pneumonia and a complex lung infection, remains in a critical condition, the Vatican has said. Archbishop Rino Fisichella, a senior Vatican official, told participants at a mass in St Peter’s Basilica on Sunday morning they should make their prayers for Francis “stronger and more intense”.

Afghanistan | The Taliban have arrested a British couple in their 70s for “teaching mothers parenting with children”. Peter Reynolds, 79, and his wife, Barbie, 75, have been running projects in schools in Afghanistan for 18 years.

Farming | Hospitals, schools and prisons are to be urged to buy more British food, as part of a government push to heal a rift with farmers over changes to inheritance tax. The environment secretary, Steve Reed, will set a target of sourcing at least half of public sector food from farms with the highest welfare standards, which should benefit British producers.

Green economy | The net zero sector is growing three times faster than the overall UK economy, analysis has found, providing high-wage jobs across the country while cutting climate-heating emissions and increasing energy security. 22,000 net zero businesses generated £83bn in gross value added last year.

Continue reading...