Germany's conservative leader Friedrich Merz has secured a significant financial package to boost defense and infrastructure spending ahead of a crucial parliamentary vote next Tuesday. After 10 hours of negotiations with the Greens, Merz declared the deal sends a clear message to allies: "Germany is back.", according to BBC reporting.

Merz, who is expected to become Germany's next chancellor following his election victory last month, stated strengthening Europe was his top priority, especially as President Donald Trump appeared uninterested in Europe's future. "Germany is making its major contribution to defending freedom and peace in Europe," Merz added.

The Merz-led conservatives and Social Democrats are simultaneously finalizing a coalition agreement, with migration as a key focus. Merz has promised tougher border measures, stating: "We will reject people at our shared borders, including asylum seekers" and "massively expand border controls" once the new government forms.

The conservative leader is working to pass debt and spending reforms through the outgoing parliament before newly elected MPs take their seats in the Bundestag on March 25. This urgency stems from the far-right Alternative for Germany (AfD) party doubling its parliamentary representation, which could block Merz's spending plans if not approved in time.

Under Germany's constitution, Merz needs a two-thirds majority for these changes. With support from the Greens and Social Democrats, he should have enough votes. Attempts by both the AfD and the Left party to challenge next week's sessions failed at the constitutional court on Friday.

The three-party agreement includes:

• Defense, civil protection, and intelligence spending over 1% of GDP exempt from debt restrictions
• A special €500 billion infrastructure fund for investments over 10 years, including €100 billion for climate initiatives
• Permission for Germany's 16 states to borrow up to 0.35% of GDP above the debt limit

The deal also allows spending on aid for states "attacked in violation of international law" to be exempt from the debt-brake, enabling outgoing Chancellor Olaf Scholz to release €3 billion in aid to Ukraine next week.

Germany's previous government collapsed in late 2024 due to disagreements over loosening debt restrictions established during the 2009 financial crisis. These limits prevented borrowing more than 0.35% of GDP while infrastructure deteriorated and military spending needs grew.

Social Democrat chairman Lars Klingbeil called the agreement a "historical signal" that would strengthen Germany's role in Europe. The Greens welcomed the €100 billion for climate funding, while outgoing Foreign Minister Annalena Baerbock praised the defense package as making Germany safer and sending "a clear signal to Ukraine, Europe and the world."

AfD co-leader Alice Weidel criticized the deal, accusing Merz of bending the constitution and burdening future generations. "This is nothing less than a financial coup," she said.