Headlines
Far-right legal challenge adds fresh obstacle to German debt plans
Published by Global Banking & Finance Review®
Posted on March 7, 2025
3 min readLast updated: January 25, 2026
Global Banking & Finance Review®
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Published by Global Banking & Finance Review®
Posted on March 7, 2025
3 min readLast updated: January 25, 2026
The AfD challenges Germany's debt plans, complicating fiscal policy changes. Parliamentary votes are crucial before the new government forms.
By Thomas Escritt and Matthias Williams
BERLIN (Reuters) -The far-right Alternative for Germany (AfD) party will file a complaint to the Constitutional Court next week over plans to raise new debt through a special fund, the Rheinische Post newspaper said on Friday, citing a senior AfD lawmaker.
Germany's would-be next chancellor, conservative leader Friedrich Merz, and the Social Democrats (SPD), with whom he is trying to form a government, plan to raise new debt and throw out restrictive borrowing rules in a fiscal policy sea-change.
But obstacles are piling up for their plans to create a 500-billion-euro ($542 billion) infrastructure fund and scrap constitutional limits on borrowing known as the 'debt brake', plans they want to get approved by the outgoing parliament.
"The old Bundestag (lower house) is at best legitimate to act in emergencies, but not to set a fundamental course for the future," the AfD's Stephan Brandner was quoted as saying.
"This ignores the will of the voters as expressed two weeks ago in the election," he added in a later statement.
The rush to agree new fiscal rules before a new government is even in place is the latest fallout from Donald Trump's tumultuous first few weeks back in the White House, which have prompted fears that the U.S.'s decades-old role as guarantor of Europe's security might be drawing to an end.
The AfD, which like Trump opposes further military aid to Ukraine, has slammed the borrowing plans as an "orgy of debt", questioning the legitimacy of the old parliament to take major decisions, while the Left party - from the other end of the political spectrum - has also threatened legal action.
Merz and the SPD are hoping the plans can clear the outgoing parliament, where the votes of the Greens - strong backers of Ukraine and also in favour of taking on more debt - would be enough to secure the needed two thirds majority.
PARLIAMENTARY HURDLES
The Bundestag will vote on the measures on March 18 before the formation of the new parliament on March 25. Then the AfD and the Left - which objects to increased military spending - would have the votes to block both moves.
The plans must also clear the Bundesrat upper house of parliament, which represents Germany's 16 federal states. There, a fourth party would be required to achieve the necessary two thirds majority.
The leader of one of those parties, the Free Voters (FW), which is in coalition with the conservatives in Bavaria, told the Welt am Sonntag newspaper on Thursday that the proposals were still too vague to vote on.
Herbert Aiwanger, the party's leader, accused Merz of going back on promises of maintaining a tight fiscal policy that the conservatives made during the election campaign.
($1 = 0.9220 euros)
(Writing by Matthias WilliamsEditing by Miranda Murray and Gareth Jones)
The AfD opposes the borrowing plans, labeling them an 'orgy of debt' and questioning the legitimacy of the old parliament to make significant decisions.
The Bundestag is scheduled to vote on the measures on March 18, before the formation of the new parliament on March 25.
The proposed fund aims to finance infrastructure projects and scrap constitutional limits on borrowing, known as the 'debt brake'.
The discussions involve the conservative leader Friedrich Merz and the Social Democrats (SPD), along with potential support from the Greens.
In the Bundesrat, the plans require a fourth party to achieve the necessary two-thirds majority, adding another layer of complexity to the approval process.
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