The Bundestag approves reform to Germany’s debt brake mechanism in order to increase defense spending and aid to Ukraine.

The German government backed a €1T plan to invest in the country’s defense and infrastructure. During an emergency meeting on March 18, the German parliament approved a debt package – amendments to Germany’s constitution that exempt defense and security spending, including expenses related to intelligence services and aid to Ukraine that exceed 1% of GDP, from the debt brake.

The debt brake is a fiscal rule enshrined in the German constitution that limits new state borrowing to no more than 0.35% of GDP annually, except in times of crisis.

Lawmakers also authorized the release of €3B for Ukrainian military aid. This document still requires approval from the upper house of parliament, the Bundesrat, on Friday.

The German army needs over €400B to be invested in the coming years. Germany aims not only to accelerate rearmament but also to establish a €500B special fund over 12 years, intended for modernizing hospitals, schools, roads, and energy networks.