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Germany's new parliament faces historic challenges
Is Europe finally ready to defend itself?
Carl Bildt, former prime minister of Sweden and co-chair of the European Council on Foreign Relations, shares his perspective on European politics from Tabiano, Italy.
How serious is Europe about really beefing up its defense and rearming?
It is very serious indeed, although it's different in different parts of Europe. If you look at the EU countries, they have been increasing their defense spending over the last few years by roughly a third. That's a hell of a lot of money.
And if you look forward, I think there's a division between, say, Germany, Poland, Nordic Baltic states. You will see substantial further increases in defense spending there. There's more a question mark in the Mediterranean region, Greece support, where there is more hesitancy to do the rapid buildup of forces that is required.
Then, there is the problem of integrating defense industries and integrating command and control efforts. But we are undoubtedly at the new stage when it comes to developing serious integrated European defense capabilities, hopefully, to operate them together with the United States. But, as things are, also have the ability to operate them in the future more independently.
Germany's chancellor-in-waiting and leader of the Christian Democratic Union party Friedrich Merz reacts as he attends an extraordinary session of the outgoing lower house of parliament, the Bundestag, on March 18, 2025.
Germany’s vote to boost military spending makes history
Since the end of World War II, the subject of military buildout has been politically taboo – first in West Germany and then in reunified Germany. But Russia’s invasion of Ukraine and hints that US President Donald Trump might pull support for Kyiv and take a reduced role in NATO have changed German minds.
On Tuesday, a two-thirds majority in the Bundestag, Germany’s parliament,made history by voting to sharply increase defense spending – by exempting it from limits on the country’s assumption of debt. Germany’s upper house, the Bundesrat, is widely expected to approve this change with a vote scheduled for Friday.
This vote would have failed a week from now when the new Bundestag, with members chosen at the February national elections, is seated, because the country’s far right and far left each oppose the move and would have had the one-third of votes needed to block it. Instead, incoming Chancellor Friedrich Merz has scored a resounding political victory.
It’s also big news for Europe and for Ukraine. A decision on Tuesday by NATO members Poland, Lithuania, Latvia, and Estonia towithdraw from the Ottawa Convention that bans anti-personnel landmines and to begin stockpiling them underlines the current sense of alarm in Eastern Europe over Russia’s future military plans. A surge in German military spending can persuade other NATO members that the money they spend on European security and the defense of Ukraine is less likely to be wasted.German Chancellor-in-waiting Friedrich Merz speaks to the media after he reached an agreement with the Greens on a massive increase in state borrowing just days ahead of a parliamentary vote next week, in Berlin, Germany, on March 14, 2025.
Germany drops debt brake, passes preliminary agreement to boost defense, infrastructure, and climate spending
What is the debt brake? A measure that requires the federal and state governments to maintain balanced budgets, effectively prohibiting them from borrowing a penny more than they can repay.
This is a big deal historically in a country that has been committed to fiscal responsibility and pacifism since its out-of-control defense spending in the run-up to World War II. The package allows for “necessary defense spending” above 1% of GDP to be exempt from debt limits, a measure Germany feels is necessary as Europe takes the reins on its own security in the wake of the US withdrawing support.
It's also a major policy victory — along with a significant amount of debt — for the incoming parliament before it even assumes power. Far-right and far-left parties have criticized the move as “deeply undemocratic,” arguing that such a sweeping fiscal measure shouldn’t be passed before the new government, in which they will have greater influence, is in place. While parliament is aiming to form a new government by late April, mid-May is a more realistic timeline.
Lars Klingbeil (l), Chairman of the SPD parliamentary group, and Friedrich Merz, CDU Chairman and Chairman of the CDU/CSU parliamentary group, talk at the end of the 213th plenary session of the 20th legislative period in the German Bundestag.
Will Germany dump its debt brake?
What is the debt brake? A measure that requires the federal and state governments to maintain balanced budgets, effectively prohibiting them from borrowing a penny more than they can repay.
This is a big deal historically in a country that has been committed to fiscal responsibility and pacifism since its out-of-control defense spending in the run-up to World War II. The package does not give an exact figure for funding but says “necessary defense spending” above 1% of GDP should be exempt from debt limits.
Intense negotiations are underway. The center-left Social Democratic Party and the center-right Christian Democratic Union/Christian Social Union — the likely pillars of the next government — are aligned in favor of scrapping the debt brake. This is due largely to the perceived need to boost military spending as the US sends worrying signs about its commitment to European defense.
But there is strong opposition from the AfD and the socialist far-left party, Die Linke, which argue that it is “deeply undemocratic” to pass such a sweeping fiscal measure before the new government — in which they will wield greater influence — is in place.
That means the narrow pathway to dumping the debt brake runs through the Green Party, which appears cautiously open to a deal but is pushing for stricter regulations on how the money will be used.
Why neither the US nor China is the world’s strongest country
What is the strongest country in the world? Parag Khanna, bestselling author and CEO of the data analytics company AlphaGeo, argues that the answer isn’t as obvious as the United States or China.
Many indices rank nations based on GDP, military strength, population, or freedom. Khanna and his team have created a new one that includes all those factors and more. The goal is to provide investors, academics, and even digital nomads a clearer sense of how safe, resilient, and stable a nation is.
Khanna calls it the Periodic Table of States, and ranks nearly 200 countries on key factors like “strength,” which is a measure of might, wealth, and resources, alongside “stateness,” a geopolitical term referring to authority and governance.
Which country came out on top? Switzerland. Germany was a close second. And the US and China didn’t make the top 5.
GZERO’s Tony Maciulis spoke to Khanna about the table, why democracy doesn’t necessarily mean stability, and where the US is heading politically in the era of President Trump 2.0.
Can Europe broker a Ukraine ceasefire?
Ian Bremmer's Quick Take: A Quick Take to kick off your week. The big news, everything around Russia, Ukraine, the United States, and Europe. The Europeans now with the ball in their court, a big summit, a coalition of the willing in London this week. And Zelensky very warmly embraced, quite literally, by UK Prime Minister Keir Starmer and by everyone in attendance. It was very different visuals, very different takeaways than the meeting between Zelensky, Trump, and Vance in the Oval Office, which couldn't have gone much worse if everyone tried.
Where we are right now, certainly this coalition of the willing had everyone that mattered in Europe. I mean, not the countries, not the leaders that have been skeptical, that have been more aligned with the Russians, or more, say, in a minimal position, like the Hungarians, like the Slovaks, but everybody else was there. So, you've got the Brits, you've got the French, you've got the Italians, and the Germans. You also have EU leadership, Ursula von der Leyen, Kaja Kallas, and also you have all of the frontline leaders that have the most at stake from a national security perspective: the Nordics, the Balts, the Poles. You even have Canada, Prime Minister Justin Trudeau, who doesn't spend very much on defense, but nonetheless going there to show he's aligned with the Ukrainians, whether or not the Americans, who the Canadians rely on completely economically, are not.
Does it matter? Does it matter? If you're asking does it matter in the sense that can the Europeans go it alone without the Americans? I'm still skeptical, though they're putting a lot more on the table now than they were a week ago, and they should have been doing that years ago. And that's going to remain a very big question, and I'm probably going to remain pretty skeptical. But very interesting that the Europeans do now have a level of ownership. Remember that Trump, both when he was running for president and once he became president, said that the United States was going to end this war, that he, Trump, would be responsible for the ceasefire, that he's going to do it himself with the Ukrainians, with the Russians, he could do it in 24 hours. That's obviously an exaggeration, but nonetheless, even as he realized it was going to take longer, he was the dominant actor. That's now changed. Keir Starmer has now told Trump that the Europeans, this coalition of the willing, is coming up with a ceasefire plan, and they are going to present it to the United States, and Trump is expecting it.
So for now, the Europeans don't just have a seat at the table, but they actually are in the driver's seat, in terms of the ceasefire on the back of the Ukrainian-US relationship having functionally blown up, and the Americans saying they're not going to do anything particularly more for the Ukrainians. They're not even prepared to sign the critical minerals deal that Zelensky now says he is prepared to sign. But if the Europeans are the ones that are going to be coughing up the money and providing the troops, then certainly they're the ones that are responsible for the terms of the ceasefire.
Now, that's interesting. And we're hearing certainly that there's going to be a lot more engagement, that potentially Starmer, Macron, and Zelensky will all three come together to the White House to meet Trump maybe later this week, maybe next week. Certainly Zelensky should not be attending meetings like that by himself anymore, I think he understands that, the Europeans understand that as well.
What they should do now, the Europeans, is present a UN Security Council resolution with the plan once Trump has seen it and is prepared to move forward. A simple thing, deciding nothing, just saying that the Security Council supports the path to peace as outlined from the UK summit. This will force Russian amendments, which the UK and France will veto, and then Russia will be forced to veto the resolution. And that's useful in a couple of different ways. First of all, it costs the French and the UK nothing, and they win a fair amount. The news will be all about how their Russian veto was used for the first time since 1989, and it places the Americans on the same side as the Europeans on the ceasefire issue, which is what the Europeans, the Ukrainians desperately need, and frankly, the Democrats and the Republicans in Congress as well.
The UK and France can then show Trump that they indeed don't need to be invited to the table, because they're at the table, they have the ceasefire plan and they're the ones that are driving it. Now, having a ceasefire plan is different from being able to implement the ceasefire and support the Ukrainians, and that is where there's still an awful lot that still needs to be accomplished.
Specifically the one piece of good news, surprising news, is that the Germans are now talking about 800 billion Euro package, outside of their debt break, that would support defense spending and infrastructure spending. They weren't talking about anything remotely like this even a few days ago. It would have to be done well before the end of the month because when the new chancellor comes in, then you are going to have the far left and the far right with the ability to block any constitutional majority. They don't have that capacity now, which means the debt break can be overridden by a vote in the Bundestag. That's really important, and would lead to German leadership in helping to finance this war.
You also have the 300 billion Euros that are frozen, the Russian sovereign assets that are mostly in the hands of the Europeans, the Belgians, as it turns out, and some others as opposed to the Americans, the Japanese. So, that could also be used to support Ukraine to buy more weapons, also to build up Ukraine's military industrial complex. In other words, while this situation is difficult and urgent, I would not yet say that it has fallen apart for the Ukrainians or the Europeans. They are still, as it were, in the game.
Now, the big question overlooking all of this is the United States and Russia, because they still want to do a deal, and that deal is not mostly about Ukraine, that deal mostly is about rapprochement between the United States and Russia over the heads of their NATO allies. This is what Trump is interested in, this is what Putin is interested. And frankly, it's a little easier to do that deal if you don't have a ceasefire, because the Russians don't really want one, than it is to do that deal if a ceasefire is a part of it. That's what has to be watched very carefully because of course, Trump and Putin are talking about where they're going to meet in person, Saudi Arabia maybe in May, Trump would even be willing to go to Moscow. This could include things like the United States taking unilateral sanctions off of Russia while the Europeans would still have them on. Could lead to a lot of business, a much bigger critical minerals deal than the one that was going to be signed between the Americans and the Ukrainians, and now, at least, is off the table.
Also note that the US Defense Department has at least temporarily suspended offensive cyberattacks against the Russians, which is quite something, again, in the context of nothing having been agreed to between the Americans and the Russians, but clearly Trump much more willing to be on Putin's good side right now than he is with Zelensky. So ultimately, that is a very big challenge for the Europeans, but they will be in far better shape if they're able to move on the ceasefire in the near-term, which looks likely, and on support for Ukraine in the medium-term, which looks like more of a challenge.
So, that's it for now. I'll talk to you all real soon.
Friedrich Merz, Vladimir Putin, Donald Trump, and Alice Weidel
Can Friedrich Merz be the leader Germany – and Europe – needs?
As expected, Friedrich Merz is set to become the next German chancellor after his conservative Christian Democrats (CDU/CSU) won one of the tightest and highest-turnout elections in the country’s postwar history.
But the 28.5% earned by Merz’s CDU/CSU was the party’s second-lowest tally ever – hardly a mandate. Not to be outdone, outgoing Chancellor Olaf Scholz’s center-left Social Democrats (SPD) came third with just 16.4% – their worst defeat in 137 years. The moderate Greens led by economy minister Robert Habeck lost ground, too, scoring a disappointing 12.5%.
By contrast, extremist parties had a great night on Sunday. The far-right Alternative for Germany (AfD) came in second place, doubling its vote share since the 2021 elections to 20.8% on the back of large gains with previous nonvoters, in the poorest districts, and across eastern Germany. The former communist Left Party (Die Linke), meanwhile, secured 8.8% of the vote by mobilizing younger women.
Neither the liberal Free Democrats (FDP) nor the far-left Alliance Sahra Wagenknecht (BSW) were able to clear the 5% threshold needed to enter parliament, increasing the number of seats allocated to the larger parties. The CDU/CSU and SPD’s combined allocation of 328 of 630 seats in the Bundestag will allow Merz to form a two-way coalition with the Social Democrats, avoiding the worst-case scenario of a weak, unwieldy, and unstable three-party coalition like Scholz’s ill-fated government with the Greens and the FDP (before it collapsed).
Though the CDU/CSU and SPD have real differences on immigration, social spending, and taxation, and their presumptive 13-seat majority won’t be large, so-called “grand coalitions” between these rival establishment parties have a long history in Germany and are popular with voters for their track record of delivering moderation and stability. Merz’s predecessor as party leader, former Chancellor Angela Merkel, presided over three of them.
But the inevitable alliance this time around is a flashing warning sign of Germans’ fading patience with the political center – and, conversely, of their growing appetite for radical movements – in a fragmented party landscape. The AfD won enough seats to make a two-way coalition with the CDU/CSU mathematically possible, but it is considered a neo-Nazi party by the entire German political establishment. Merz has made it clear that, despite his flirtation with them over migration and the recent embrace by Elon Musk and US Vice President JD Vance, the “firewall” keeping the extremists out of power will continue to hold – for now at least.
Yet as mainstream parties continue to lose voters to the far right, they will be increasingly forced into forming ever weaker and more ineffective coalitions just to stay in power. Alice Weidel, the AfD’s leader, has set her sights on the 2029 elections, hoping that the AfD can capitalize on – and nudge – the failure of yet another disappointing centrist government to become Germany’s strongest party and kingmaker. Over the next four years, it will aim to use its much-strengthened position to dominate agenda-setting and sabotage the new government as much as possible.
One weapon the AfD may be able to wield to hamstring Merz’s coalition is the so-called “blocking minority” it’ll form with the hard-left Die Linke, given the radical parties’ combined 216 Bundestag seats – just above the 210 seats needed to thwart constitutional reforms like the loosening of Germany’s strict fiscal rules (aka “debt brake”), which require a two-thirds majority in both houses of parliament.
Created in 2009 to restrict deficits, the constitutionally enshrined debt brake has since limited Berlin’s ability to borrow money to finance public spending. But 2025 is not 2009. Europe’s largest economy is in the midst of a profound economic crisis at a time of unprecedented geopolitical upheaval. Berlin needs to unlock hundreds of billions of dollars to modernize the country’s infrastructure, lower energy costs, invest in innovation, revive its stalled economy, ramp up support for Ukraine, and bolster its defense capabilities. The scale of the challenge has been compounded by President Donald Trump’s recent pivot toward Russia and threat to abandon Europe as the war in Ukraine turns three years old.
Merz struck the right level of urgency when he said that his “absolute priority” as chancellor will be “to strengthen Europe” in order “to achieve independence” from the United States, given that the Trump administration seems to be “largely indifferent” to Europe’s fate. A staunch transatlanticist before Washington started behaving like an adversary, Merz understands that what’s at stake is not just German interests but Europe’s future.
But Germany’s incoming chancellor has his work cut out for him. The AfD will obstruct all attempts to revamp the debt brake and raise borrowing, while the anti-militarist Die Linke supports reforming the borrowing rules but has explicitly vowed to oppose any vote to increase the country’s defense spending on principle. With a blocking minority in the Bundestag, these fringe parties could seriously undermine Merz’s agenda and, by extension, European security.
Merz’s plan to circumvent that challenge is the kind of boldness Germany needs more of. Instead of waiting for the blocking minority to be seated, the soon-to-be chancellor is exploring the possibility of pushing the defense spending hike through the lame-duck parliament, where mainstream parties will technically have a two-thirds supermajority until the newly elected parliament is sworn in on Mar. 25. The fiscally conservative Merz ruled out using this gimmick to reform the debt brake outright yesterday, but he’s reportedly in talks with the Social Democrats and the Greens to set up a special off-budget defense fund worth around 200 billion euros (this would also require a two-thirds majority).
Admittedly, four weeks is very little time to negotiate a workaround while juggling tricky coalition talks in a country that’s notoriously averse to big, fast changes. But extraordinary times call for extraordinary measures. If the German political establishment can’t muster the courage to act decisively now, it may not just be the AfD knocking on their doors in four years – Russian troops could be knocking at Europe’s doorstep, too.