| World Politics Review 3/5/25 |
| Christian Democratic Union leader Friedrich Merz and Social Democratic Party co-leader Lars Klingbeil at a press conference in Berlin, Germany, March 4, 2025 (dpa photo by Carsten Koall via AP). |
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Germany: The party leaders of the country’s prospective governing coalition said yesterday they had agreed to loosen Germany’s limits on federal borrowing in order to further raise defense spending. They also said they plan to borrow $530 billion to finance the modernization of the country’s infrastructure. Friedrich Merz, the presumptive next chancellor, said his Christian Democratic Union, or CDU, and outgoing Chancellor Olaf Scholz’s Social Democrats, or SPD, would bring both proposals before the lame-duck parliament next week to increase the chances of the proposals being passed. (AP) |
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Our Take: Germany borrowing hundreds of billions of dollars to ramp up defense and infrastructure spending, and relaxing the country’s semi-sacred “debt brake” in order to do so, is the fiscal equivalent of Japan announcing it will pursue nuclear weapons. It is a measure of the changes the events of the past few weeks have already effected on global politics, while also accelerating those changes. |
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In the postwar period, Germany’s political culture and governance has been defined by fiscal discipline and pacificism. And as columnist Ulrike Franke noted in January, that was complemented in the 1980s by an aversion to grand visions. That would explain why “big idea” proposals like those announced yesterday, which amount to a sea-change for German politics, were largely absent during campaigning for the country’s elections last month. It’s also fair to presume that the scale of the CDU and SPD’s proposals would not have been possible without the whiplash changes in trans-Atlantic relations seen over the past month. |
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We already have coverage planned to examine the implications of this change for Germany, European security and the EU’s economy, which we’ll be publishing in the coming days and weeks. So today, we’re focusing on the political implications for Europe. |
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Most notably, this announcement from Germany’s presumptive next government comes after a turbulent year for the EU. Both France and Germany faced political paralysis that prevented them from assuming their traditional leadership roles in the union. That coincided with the appointment of a new European Commission that was only seated in early December. Combined, that raised questions about Europe’s political preparedness for the challenges that U.S. President Donald Trump’s return to the White House was widely expected to present. |
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Even before the results of last month’s elections were officially announced, however, Merz signaled that he was prepared to return Germany to its leadership role in Europe, a somewhat surprising development given that Merz has long been considered a comparatively lowkey and risk-averse politician. Now these spending proposals, which Merz characterized as a commitment to doing “whatever it takes,” amount to a declaration that “Germany is back.” |
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That will undoubtedly be welcomed in Brussels, as Germany’s flagging economy had begun to exert an increasingly heavy drag on Europe’s ability to meet its mounting challenges. Coming alongside the U.K.’s close cooperation in support of Kyiv in light of Trump’s new approach to the war in Ukraine, it signals that European leaders have recognized that the situation calls for drastic measures. |
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Of course, these factors alone are insufficient for Europe to fully regain its political momentum. And plenty could still hobble Brussels’ leadership, including internal spoilers like Hungarian Prime Minister Viktor Orban, as well as the fact that many member states are led by or experiencing the rise of leaders and parties that are ideologically aligned with Trump. But taken together, the developments of the past week suggest it may be too early to write off Europe’s prospects in the emerging era of great power politics. |