Germany's State Borrowing Gambit Faces Legal Hurdles

Germany's prospective chancellor Friedrich Merz's ambitious state borrowing program faces legal challenges from opposition parties before a critical parliamentary vote. The measures, designed to boost infrastructure and defense spending, require a two-thirds majority to pass constitutional amendments amid concerns of opposition and political shifts internationally.

Germany's chancellor-in-waiting, Friedrich Merz, is facing significant legal challenges to his ambitious state borrowing program just ahead of a crucial parliamentary vote. The far-right Alternative for Germany party has challenged the plan at the constitutional court, arguing insufficient time was given for expert review.

Additionally, opposition through complaints and petitions comes from independent lawmakers and members of the Free Democrats. Merz seeks a 500 billion euro infrastructure fund, with the support of the Greens, to drive economic growth and bolster defense spending amid potential resistance in the upcoming parliament.

The proposal has cleared early legal challenges and gained approval from the parliamentary budget committee. However, Merz's coalition, including Social Democrats and the Greens, must secure enough votes to amend the constitution. They argue urgency due to shifting U.S. policies and regional security concerns.

(With inputs from agencies.)