Germany's Debt Debate: AfD Challenges Fiscal Policy Shift

Germany's Alternative for Germany (AfD) party is set to legally challenge a proposal to raise new debt via a special fund. The move, supported by conservative leader Friedrich Merz and the Social Democrats, aims to bypass current borrowing restrictions, a decision criticized by the AfD and the Left party.

Germany's Alternative for Germany (AfD) party will contest a controversial new debt-raising plan at the constitutional court. The Rheinische Post reported Friday that the party opposes the proposal, which involves creating a 500-billion-euro infrastructure fund and removing current borrowing limits.

The plan is backed by Friedrich Merz, a leading conservative, and the Social Democrats (SPD), who are in the process of forming a government. This potential fiscal overhaul has been labeled by the AfD as an 'orgy of debt,' with the legitimacy of the outgoing parliament to make such foundational changes being questioned.

As the Bundestag is scheduled to vote on these measures on March 18, opposition from an increased number of AfD and leftist lawmakers could pose a substantial barrier to the plan's approval.

(With inputs from agencies.)