Published by Global Banking & Finance Review®
Posted on March 2, 2025
2 min readLast updated: January 25, 2026
Germany's new government is considering special funds for defence and infrastructure, potentially worth billions, amid coalition talks.
By Andreas Rinke
BERLIN (Reuters) - The parties in talks to form Germany's new government are considering quickly setting up two special funds potentially worth hundreds of billions of euros, one for defence and a second for infrastructure, three people with knowledge of the matter told Reuters.
Economists advising the parties that will likely form a new government coalition estimate around 400 billion euros ($415 billion) are needed for the defence fund and 400 billion to 500 billion euros for the infrastructure fund, the people said.
Friday's heated White House meeting between Ukrainian President Volodymyr Zelenskiy and U.S. President Donald Trump increased a sense of urgency in Berlin to act faster on spending for Germany's own defence and for Ukraine, they said.
Senior figures from Germany's conservatives and Social Democrats began exploratory talks on Friday about forming a coalition government in the hope that Friedrich Merz, leader of the conservative bloc which came first in last week's election, would form a government by Easter.
The two special funds are being discussed by three parties - the Christian Democrats (CDU), the Bavarian Christian Social Union (CSU), and the Social Democrats (SPD) of Chancellor Olaf Scholz - and they are working on details, the people said on condition of anonymity.
No final decisions have been made yet, they added.
The parties declined to comment, citing confidentiality of the talks.
($1 = 0.9639 euros)
(Reporting by Andreas Rinke; writing by Tom Sims;Editing by Elaine Hardcastle)
The defence fund is estimated to require around 400 billion euros, while the infrastructure fund may need between 400 billion to 500 billion euros.
The coalition talks involve the Christian Democrats (CDU), the Bavarian Christian Social Union (CSU), and the Social Democrats (SPD) led by Chancellor Olaf Scholz.
A heated meeting between Ukrainian President Volodymyr Zelenskiy and U.S. President Donald Trump heightened the sense of urgency for Germany to expedite its own defence spending.
No final decisions have been made yet regarding the establishment of the special funds.
Senior figures from Germany's conservatives and Social Democrats began exploratory talks about forming a coalition government, but they have declined to comment on the specifics due to confidentiality.
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