Germans Reach Deal to Spend Big on Defense, Climate and More

Friedrich Merz, the likely next chancellor of Germany, announced on Friday that he had secured the votes to allow for extensive new government spending, including for defense, clearing the way for a stunning turnabout in German strategic and fiscal policy before he even takes office.

The deal should now allow Mr. Merz to pass a raft of measures in Parliament next week that he has billed as a response to President Trump’s moves to pull back American security guarantees for Europe.

It includes what party leaders called crucial investments in German competitiveness and its efforts to reduce fossil fuel emissions to fight global warming. And it breathed new life into a coalition of center-left and center-right parties that have long governed Germany but have wilted in a new era of populism in recent years, losing votes to the far left and the far right.

The measures would lift Germany’s hallowed limits on government borrowing as they apply to military spending. It would exempt all spending on defense above 1 percent of the nation’s gross domestic product from those limits, and it would define “defense” broadly to include intelligence spending, information security and more.

Effectively, that would allow Germany to spend as much as it can feasibly borrow to rebuild its military.

“There will no longer be a lack of financial resources to defend freedom and peace on our continent,” Mr. Merz said, adding: “Germany is back. Germany is making a major contribution to defending freedom and peace in Europe.”