German conservative leader Friedrich Merz reached an agreement with the Green party on a debt-funded spending package for defense and infrastructure, overcoming a key hurdle ahead of a crunch vote in parliament next week.

German Chancellor-in-waiting Friedrich Merz said on Friday he had secured the crucial backing of the Greens for a massive increase in state borrowing, clearing the way for the outgoing parliament to approve the historic deal next week.

Under Germany's constitution, Merz needs a two-thirds majority to get the changes passed. With the support of the Greens and Social Democrats, he should succeed. Urgent motions by both the AfD and the Left to challenge next week's sessions of the outgoing parliament failed at the constitutional court on Friday, enabling the vote to go ahead.