Will the financial package fail because of Bavaria? Merz expects approval

The marathon negotiations with the Greens are over, but the likely future Chancellor Friedrich Merz also needs a two-thirds majority in the Bundesrat for his huge financial package. In the new week, all eyes will therefore not only be on the Bundestag (Tuesday), but above all on the state chamber on Friday - and there on Bavaria, which may have to deny Merz the decisive votes.

The six yes votes from Bavaria are at risk because the Free Voters have so far refused to approve the package for defence, infrastructure and climate protection. Merz is therefore putting subtle pressure on the Bavarian Minister President Markus Söder, who himself helped negotiate the package during the exploratory talks between the CDU, CSU and SPD. ‘I am very confident that everyone involved in Bavaria also recognises their responsibility,’ Merz told Bild am Sonntag.

Coalition committee in Bavaria

In the struggle over the position of the Bavarian state government, there will reportedly be a special meeting of the CSU and Free Voters coalition committee on Monday. In order for Bavaria to be able to vote in favour in the Bundesrat, the coalition there must be in agreement. Otherwise, the only option is to abstain, which would be tantamount to a rejection.

Söder would therefore either have to persuade the Free Voters to vote in favour or - this is at least theoretically possible - break up his coalition. The SPD has already offered itself as an alternative coalition partner. ‘With the SPD, a clear yes from Bavaria in the Bundesrat to the infrastructure and defence package would be guaranteed,’ said the Vice President of the Bavarian state parliament, Markus Rinderspacher (SPD), to the “Tagesspiegel”.

Why the votes from Bavaria are important

In the state chamber, 46 of the 69 votes are required to pass the amendments to the Basic Law. State governments in which only the CDU/CSU, SPD and Greens are involved have 41 votes. Bavaria's six votes would therefore be enough.

It remains to be seen how state governments with the participation of the FDP, Left Party and BSW will decide. The FDP is involved in Saxony-Anhalt and Rhineland-Palatinate (four votes each), the BSW is in government in Thuringia and Brandenburg (also four votes each). The Left Party is part of the state governments in Bremen and Mecklenburg-Western Pomerania (three votes each).

This is to be regulated by the amendment to the Basic Law

Following the agreement between the CDU/CSU, SPD and Greens, the Basic Law is to be amended in several places to regulate three things: Expenditure on defence, civil protection, intelligence services and cyber security should only fall under the debt brake up to a limit of one percent of gross domestic product (GDP) - i.e. around 44 billion euros. Anything above this can be paid for from loans.

In addition, the federal states are to be given more room for manoeuvre for their own debt: Together, they are to be allowed to take out loans amounting to 0.35 per cent of GDP in future. Finally, a special fund for investments in infrastructure and climate neutrality is to be anchored in the Basic Law, which is to be exempt from the debt brake and fed with 500 billion euros from loans.

Draft bill in several committees

According to the German Press Agency, the draft bill provides for the words ‘climate neutrality by 2045’ to be included in the new Article 143h of the Basic Law. Merz emphasised in ‘Bild am Sonntag’: ‘I will certainly not become a Green. But I will be a chancellor who takes responsibility for environmental policy.’

The Basic Law also states that the investments from the special pot are intended ‘for additional investments’. ‘Additionality exists if an appropriate investment ratio is achieved in the federal budget in the respective financial year,’ it says. Several Bundestag committees discussed the draft on Sunday.