BERLIN -- Germany's Bundestag, the lower house of parliament, on Tuesday approved a major constitutional amendment to loosen the country's strict "debt brake" policy, paving the way for increased spending on defense, infrastructure, and climate neutrality.

The amendment was proposed by the Social Democratic Party (SPD) and the CDU/CSU alliance during their negotiations to form a new government after February's federal election.

It allows defense and certain security-related expenditures exceeding 1 percent of nominal GDP to be excluded from debt brake calculations. It also establishes a new 500-billion-euro (about 547 billion U.S. dollars) special fund dedicated to infrastructure and climate-neutrality investments.

The measure requires a two-thirds majority in the Bundestag, a threshold comfortably cleared with additional support from the Green Party. It now moves to the Bundesrat, the upper house of parliament, where a two-thirds majority is also required for passage.

Speaking in the Bundestag on Tuesday, CDU/CSU parliamentary group leader Friedrich Merz called the amendment a paradigm shift in defense policy. "While Europe cannot yet defend itself alone, it must move step by step toward an independent European defense," Merz said.

Christian Duerr, leader of the Free Democratic Party's (FDP) parliamentary group, warned against the move, arguing that it would lead to "unbridled debt accumulation" and fundamentally alter the country's financial architecture.