The debate over the deal cast defense spending as an issue of growing urgency as doubts increase about the U.S. commitment to European allies. Long-term strains on Germany's debt limits, combined with the recent shift in U.S. security policy under President Donald Trump, pushed the negotiations into a deal that now goes before the parliament.

An agreement has been reached on plans by German chancellor hopeful Friedrich Merz to massively ramp up public borrowing, a source from the Greens party said on Friday, adding: "We are satisfied." Greens' support is seen as crucial to Merz's bid to pass the debt plan with a two-thirds majority in Germany's outgoing parliament.

German Chancellor-in-waiting Friedrich Merz reached an agreement with the Greens on Friday on a massive increase in state borrowing just days ahead of a parliamentary vote next week, Reuters reported,

The CDU/CSU bloc and the SPD have reached an agreement with the Greens on a massive increase in government borrowing, news agencies report, citing party sources.The conservative CDU/CSU bloc of German election winner Friedrich Merz and the Social Democrats have agreed in principle with the Greens on plans for a massive increase in state borrowing ahead of

Germany's chancellor-in-waiting and leader of the Christian Democratic Union party (CDU) Friedrich Merz speaks during an extraordinary meeting of the German Bundestag, to discuss a €500-billion infrastructure fund and a revamp of borrowing rules aimed at modernizing the military and stimulating economic growth ahead of the formation of a new parliament at end of March,