Germany: Risk of Bavarian Block in Debt Brake Constitutional Reform – Long-Term Increase by €1.7 Trillion

The agreement reached between CDU/CSU, SPD, and Greens last Friday (14.3.25) may secure the two-thirds majority vote in the Bundestag for the constitutional reform of the debt brake, expected to increase long-term spending by €1.7 trillion due to Green additions to the Mertz package. However, approval from the Bundesrat, representing Germany’s 16 states, is uncertain due to significant Bavarian opposition. While the Bundestag requires a two-thirds majority for constitutional changes, the same applies to the Bundesrat, where parties like the far-right Free Voters in Bavaria, the Left Party, and FDP hold substantial sway. Opposition ranges from the Left Party supporting debt brake relaxation but opposing the Mertz package to the FDP and AfD strongly against it. A coalition of these opposing forces could block the reform, potentially causing a state crisis, according to CDU member Christoph de Vries. SPD’s economic policy representative, Ralf Stegner, emphasized the need for an intensive campaign to pass the reforms, warning of political failure benefiting figures like Putin, Trump, or AfD leader Baerbel Wiegel. The stance of Bavarian representatives, governed by a CSU-Free Voters coalition, remains critical, with the Free Voters opposing the package, possibly jeopardizing their place in the Bavarian government.