FILE PHOTO: Christian Democratic Union (CDU) party leader and Chancellor-in-waiting Friedrich Merz speaks on the day he campaigns for the upcoming state election in Hamburg, Germany, February 28, 2025. REUTERS/Fabian Bimmer/File Photo
BERLIN (Reuters) -The parties in talks to form Germany's new government are considering quickly setting up two special funds potentially worth hundreds of billions of euros, one for defence and a second for infrastructure, three people with knowledge of the matter told Reuters.
Economists advising the parties that will likely form a new government coalition estimate around 400 billion euros ($415 billion) are needed for the defence fund and 400 billion to 500 billion euros for the infrastructure fund, the people said.
Friday's heated White House meeting between Ukrainian President Volodymyr Zelenskiy and U.S. President Donald Trump increased a sense of urgency in Berlin to act faster on spending for Germany's own defence and for Ukraine, they said.
Senior figures from Germany's conservatives and Social Democrats began exploratory talks on Friday about forming a coalition government in the hope that Friedrich Merz, leader of the conservative bloc which came first in last week's election, would form a government by Easter.
But the hope is that the funds would be approved in March during the current parliament before a new government is formed, the people said.
The two special funds are being discussed by three parties - the Christian Democrats (CDU), the Bavarian Christian Social Union (CSU), and the Social Democrats (SPD) of Chancellor Olaf Scholz - and they are working on details, the people said on condition of anonymity.
No final decisions have been made yet, they added.
The parties declined to comment, citing confidentiality of the talks.
($1 = 0.9639 euros)
(Reporting by Andreas Rinke; writing by Tom Sims;Editing by Elaine Hardcastle)
