Germany’s Greens are growing increasingly hesitant to support Friedrich Merz’s ambitious state borrowing plans, with party insiders warning that approval is looking less likely by the day. Their resistance threatens to derail Merz’s proposed €500 billion infrastructure fund and debt reform package, which had sparked market optimism about revitalizing Europe’s largest economy.
Despite the Greens’ pushback, Merz’s allies see this as a bargaining tactic to secure more concessions. After winning last month’s election, Merz aims to loosen Germany’s strict borrowing rules to boost growth and strengthen the military, citing concerns over an aggressive Russia and an unreliable U.S. However, to pass his measures in the outgoing parliament, he needs the Greens’ backing. The new parliament, set to convene on March 25, may make things even trickier, with a growing presence of far-right and radical-left lawmakers poised to block key proposals.
The Greens are pressing for stronger climate commitments and a larger share of the infrastructure fund for state governments, demanding an increase from €100 billion to €200 billion. Co-leader Felix Banaszak warned that approval was now further out of reach than before. In response, Merz hinted at possible climate-related concessions, hoping to sway Green support.
SPD officials, who are working toward a coalition with Merz’s conservatives, believe the Greens are simply strengthening their negotiating position. Bremen’s SPD mayor Andreas Bovenschulte dismissed the threat, suggesting the Greens ultimately want to contribute constructively and will likely come to an agreement. Whether that happens remains to be seen, but for now, Merz faces a rocky road ahead.
