(Bloomberg) — German conservative leader Friedrich Merz said he’s “very optimistic” that a landmark debt-spending package will be approved after a parliamentary debate on Thursday laid bare a deep rift with the Greens, whose support he needs.
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Merz, who aims to succeed Chancellor Olaf Scholz in the coming weeks, acknowledged that parallel talks with the Greens to secure the defense and infrastructure spending package and coalition talks with the Social Democrats are proving “demanding.” But he expressed confidence that his agenda would prevail.
“We always have several balls in the air,” Merz told public broadcaster ZDF late Thursday. Still, “there are in my view possibilities for solutions.”
Merz’s Christian Democratic-led bloc and the SPD are rushing to secure a supermajority in parliament to approve sweeping constitutional amendments that would release defense spending from debt restrictions and set up a €500 billion ($542 billion) fund for infrastructure investment.
For that, the main parties — which are cobbling together a new coalition government after last month’s election — are courting the Greens, who have rejected the package as a grab bag for election favors. A debate in the lower house, or Bundestag, on Thursday showed that the environmental party was still unmoved days before a final vote in the chamber on Tuesday.
Monika Schnitzer, who chairs the German Council of Economic Experts that advises the government, said the Green critique of the package was valid and that policymakers needed to ensure that the new fiscal leeway not be used as “presents to clients” — “a tax break here, a subsidy there.”
“The really crucial thing at this point is to make sure that the new investment will be additional to what investment we have been doing so far,” Schnitzer said in an interview on Bloomberg Television.
Fumbled Chances
Merz’s debate performance Thursday came under scrutiny after he initially lauded the Greens for their cooperation, only to brusquely insist the party should be satisfied with climate-related measures on offer. “What more do you want than what we have proposed to you?” Merz asked, prompting jeers from the party.
The prospective chancellor fumbled the speech and alienated the Greens at a critical moment in the negotiations, a senior SPD lawmaker said. A failure to get the financial package over the line would also remove the basis for coalition talks between Merz’s CDU/CSU bloc and the SPD, the lawmaker said, speaking on condition of anonymity as the delicate talks take place behind closed doors.
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