REUTERS
Germany’s Bundestag, the lower house of parliament, has approved creation of a 100 billion euro (U.S. $107.2 billion) special defense fund that Chancellor Olaf Scholz announced in response to Russia’s invasion of Ukraine.
The money is destined to help rebuild Germany’s military, which has suffered years of neglect following the end of the Cold War.
The government decided to amend the constitution to create the fund to exempt it from Germany’s so-called debt brake that enforces fiscal restraint. It needed backing from the opposition conservatives as well as the ruling coalition to reach the two-thirds parliamentary majority needed for a constitutional change.
The fund should enable Germany to meet the NATO target of spending 2% of its economic output on defense each year, making it the world’s third-biggest military spender behind the United States and the People’s Republic of China. (Pictured: Soldiers of the Bundeswehr participate in NATO exercises in Germany in May 2022.)
The Bundestag also passed a budget with 139 billion euros of new debt this year — Germany’s second-highest-ever level — to cushion Europe’s biggest economy against fallout from the Ukraine conflict.
The budget required parliament to allow an exemption from Germany’s debt brake for a third year in a row, with the new debt to go toward funding aid for households and companies struggling with high energy prices as well as support for Ukrainian refugees and Kyiv.
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