'German government hopefuls planning billions for defence spending'

The two parties hoping to form Germany's next government are planning to plough hundreds of billions of euros into defence and infrastructure when in power, the Bild newspaper reported Sunday.

Both subjects have become all the more pressing for Berlin's prospective new leaders as Europe's largest economy stutters and the United States' apparent pivot toward Russia casts doubt over the continent's security.

Citing several sources close to the negotiations, Bild said the investment plan was brought up on Friday at coalition talks between the conservative CDU/CSU alliance, which came top in the recent elections, and the centre-left Social Democrats (SPD).

Both parties are considering the quick establishment of two special investment funds, one for the threadbare German army and another to renovate the country's creaking infrastructure.

The amounts discussed for each of the funds are "significantly higher" than the fund of 100 billion euros ($104 billion) already set aside for the German army in 2022 after the Russian invasion of Ukraine, according to the newspaper.

Both sides' negotiators looked at economist reports evaluating the needs of the German army at 400 billion euros and that of the country's infrastructure at half a trillion euros, Bild added.

The two funds are conceived as emergency spending outside the federal budget and as such exempt from Germany's "debt brake", which places a strict constitutional limit on how much the state can borrow outside of crises.

According to Bild both parties are likewise considering relaxing that restriction, seen by a growing number of Germans as a straitjacket ill suited to the challenges facing the country.

But any such reform would require a two-thirds majority in parliament, which the proposed Conservative-Social Democrat coalition would not have in the new legislature.