Decision Week for Major Financial Package: Legal Challenges Loom

A critical week unfolds in Berlin as the Bundestag prepares to vote on a substantial financial package negotiated by the Union, SPD, and Greens. Scheduled for discussion on Tuesday, this package requires a two-thirds majority for approval, followed by a session in the Bundesrat on Friday. However, several lawmakers are attempting to halt the process by submitting emergency applications to Germany's Federal Constitutional Court in Karlsruhe. Their actions could jeopardize the foundation of a potential coalition government led by Friedrich Merz from the CDU.

The independent representative Joana Cotar has filed a second complaint, seeking a delay in the vote. The Constitutional Court has confirmed the receipt of her application. Additionally, three members of the FDP are also pursuing urgent legal action, arguing that the time allocated for deliberations on the debt package is insufficient.

Previously, the Constitutional Court dismissed several requests aimed at canceling the special session of the Bundestag and blocking the financial package. These included appeals against the expedited legislative procedure aimed at amending the constitution.

Moreover, there are still unresolved cases pending at the court, with three additional constitutional disputes and four complaints under consideration. Among these is a challenge from the Left party regarding the rushed legislative process to amend the constitution.

The coalition of Union, SPD, and Greens aims to modify the constitution in multiple respects. Notably, they plan to limit public spending on defense, civil protection, intelligence services, and cybersecurity to one percent of the gross domestic product (GDP)--approximately 43 billion euros based on 2024 estimates--subject to the debt brake. Any expenditure exceeding this threshold could be financed through borrowing. Furthermore, the proposal seeks to grant states greater flexibility in their borrowing capacities and establish a special fund within the constitution for investments in infrastructure and climate neutrality, exempt from the debt brake and supported by 500 billion euros in loans.

Within the CDU, dissent is emerging. Former party secretary Mario Czaja has publicly expressed his opposition to the financial package, emphasizing concerns over generational fairness and the integrity of the justifications provided for the constitutional amendment.

In the Bundesrat, a total of 46 votes out of 69 is required to approve the constitutional changes. Currently, the regional governments comprised solely of CDU/CSU, SPD, and Greens hold 41 votes. The inclusion of six votes from Bavaria would ensure passage; however, the Free Voters, who govern alongside the CSU in Bavaria, have recently voiced skepticism about their support.

On Monday afternoon, the coalition committee of the CSU and Free Voters is expected to convene to discuss Bavaria's voting strategy in the Bundesrat. Nevertheless, Minister-President Markus Söder has indicated a strong likelihood of Bavaria supporting the financial package.

Simultaneously, negotiations between the Union and SPD are ongoing, focusing on the financial package amid broader discussions about fiscal responsibility. CDU leader Merz has acknowledged that despite the agreement on the financial package, challenging negotiations regarding budgetary cuts and necessary reforms lie ahead.

Currently, 16 working groups are engaged in discussions to prepare a coalition agreement, followed by a financial review before the parties decide on forming a coalition government. Merz aims for government formation by Easter.