BERLIN 

The parliamentary leaders of the Christian Democratic Union and its Bavarian sister party the Christian Social Union (CSU), along with the Social Democrats (SPD) and the Greens, have reached an agreement on a multi-billion-euro defense and infrastructure package after lengthy talks, media reports said Friday.

Responding to the fiscal agreement, Germany’s chancellor-in-waiting Friedrich Merz said: “This is a huge sum. We consulted and reached a good result that was acceptable to all parties involved.”

Merz explained how the €500 billion debt for infrastructure would be allocated.

All investments "made to achieve climate neutrality are not affected by the debt brake and can be financed with €500 billion over a period of 12 years," Merz added.

He pointed out that a major portion of the fiscal package would be used to improve the country’s military capabilities.

"We are capable of defense and now fully prepared to defend ourselves. There will be no shortage of financial resources to defend peace on our continent. Germany is back,” Merz said.

The CDU/CSU, SPD and Greens have reportedly agreed that €100 billion from the debt-financed €500 billion infrastructure fund will be used for climate protection and the climate-friendly restructuring of the economy.

The current parliament (Bundestag) could pass the package next Tuesday, but after that, approval by two-thirds of the votes in the Federal Council (Bundesrat) is also required.

In the new parliament, set to be constituted on March 25 following last month’s snap polls, the CDU/CSU, SPD, and Greens no longer have the necessary two-thirds majority, so time was running out to pass the package with the lame duck Bundestag.

In their exploratory talks for a coalition, the CDU, CSU, and SPD had agreed to relax the debt brake to allow for higher defense spending and to create a debt-financed special fund of €500 billion ($545 billion) for infrastructure.

However, the Greens initially refused their approval, which is necessary for passage.