Germany is moving closer to a major constitutional amendment to loosen its debt restrictions.

The proposed changes, supported by the Greens, SPD, and Union, aim to create a €500 billion fund for infrastructure and climate-neutral investments, bypassing the debt brake.

Schleswig-Holstein's Environment Minister Tobias Goldschmidt has expressed strong support, calling the agreement a reasonable compromise.

However, critics like Mecklenburg-Vorpommern's CDU leader Daniel Peters warn that unclear definitions of climate neutrality could lead to legal challenges and harm industries.

The plan also includes increased defense spending and more borrowing flexibility for states.

While some see this as a necessary step for modernization, others fear it could undermine financial reforms and economic stability.