German Chancellor-in-waiting Friedrich Merz reached an agreement with the Greens on Friday on a massive increase in state borrowing just days ahead of a parliamentary vote next week. This should ensure the package's approval in the lower house of Germany's parliament on Tuesday and by the upper house on Friday.

An agreement has been reached on plans by German chancellor hopeful Friedrich Merz to massively ramp up public borrowing, a source from the Greens party said on Friday, adding: "We are satisfied." Greens' support is seen as crucial to Merz's bid to pass the debt plan with a two-thirds majority in Germany's outgoing parliament.

Germany’s chancellor-to-be Friedrich Merz has agreed a deal with the Green party to inject hundreds of billions into the country’s military and ageing infrastructure, paving the way for his spending package to be adopted by parliament next week.