Crisis Meeting Over Massive Debt: Greens Leadership Faces Internal Resistance

In a high-stakes negotiation concerning a multi-billion-euro debt deal, political parties are vying for advantage. The Union, SPD, and the Greens are currently engaged in discussions at undisclosed locations regarding a significant funding package aimed at military and infrastructure enhancements, including roads, schools, and railways. However, the approval of this funding package remains uncertain.

This week marked the first time that SPD leader Lars Klingbeil and CDU leader Friedrich Merz had to negotiate directly with the Greens, leading to a series of meetings in secretive venues. The urgency is real: the outgoing Bundestag is expected to discuss the debt agreement shortly, which proposes borrowing beyond the existing debt brake regulations, amounting to EUR500 billion for infrastructure investments. To proceed, amendments to the constitution requiring a two-thirds majority will be necessary, which means the Greens' support is crucial.

Next Tuesday, the Bundestag is scheduled to vote on the debt agreement. However, it remains unclear whether a majority can be secured, especially since the Bundesrat must also approve the constitutional amendments with the same two-thirds majority.

The debate surrounding the debt deal has already impacted construction financing, with building interest rates rising by 0.5 percentage points as a result of the discussions. The financial implications are significant, with estimates suggesting that the debt could rise to as much as EUR800 billion due to this shift in policy, despite Merz's prior commitments to avoid new debts.

According to sources, a crisis meeting was held among the Greens on Wednesday morning, where intense discussions reportedly took place. State representatives, led by Winfried Kretschmann, the Minister-President of Baden-Württemberg, are advocating for a compromise. They argue that the additional debt would benefit the states as well, which is particularly vital for regions, like Baden-Württemberg, facing upcoming state elections.

In contrast, the leaders of the Greens' parliamentary group, Britta Haßelmann and Katharina Dröge, expressed opposition to the deal. Their stance poses a significant challenge for the Black-Red coalition, as they argue that the Greens must establish their identity in opposition and that the parliamentary group needs a strategic reevaluation that does not involve supporting the coalition.

The SPD leader finds himself caught in a difficult position, needing the Green votes for the military budget while facing potential backlash if the Greens refuse to support the EUR500 billion infrastructure plan. Some Greens have indicated a willingness to release more funds for the military but are hesitant to back the full infrastructure package, suggesting instead that the new Bundestag should vote on a comprehensive reform of the debt brake.

This shift creates complications for Klingbeil, who must navigate the risk of losing support from the SPD if they cannot secure the necessary funding for infrastructure. The SPD has learned from their experiences in the coalition government that operating without a solid financial foundation is perilous.

Merz faces a dual challenge within his party, with many members favoring increased military spending while opposing the extensive infrastructure funding. However, if he fails to secure the support of the SPD, he risks alienating his potential coalition partner. Moreover, pursuing an agreement with the Left Party to amend the debt brake could fracture the CDU, as there are strong divisions regarding collaboration with leftist parties.

As negotiations continue, the complexity of establishing a consensus becomes increasingly apparent, leaving the outcome uncertain.