Scholz calls for Germany needs 'massive' investment, especially in defence

Embattled Chancellor Olaf Scholz on Monday said Germany needs "massive" investment, especially in defense, as he prepared for a confidence vote expected to pave the way to snap elections.

"It is high time to invest powerfully and decisively in Germany," Scholz said in a speech to parliament ahead of the vote, which he called after the collapse of his coalition last month.

"Today a highly armed nuclear power is waging war in Europe just two hours' flight from here," he said about Russia's war in Ukraine. "We must invest massively in our security and defence."

The German armed forces had been "in a deplorable state" until his announcement of a special 100-billion-euro ($105 billion) defence fund after Russia's 2022 full-scale invasion of Ukraine, he added.

Scholz's government, a three-way coalition between his Social Democrats (SPD), the Greens and the pro-business FDP, had been plagued by deep discord on spending in Europe's largest economy.

Scholz ended the stalemate in November by sacking finance minister Christian Lindner, from the FDP, leading to the collapse of the coalition.

Scholz on Monday called for a reform of Germany's so-called debt brake, which limits state borrowing to 0.35 percent of GDP -- a constitutional rule that had been fiercely defended by Lindner.

Scholz said that reforming the debt brake would decide "the question of whether and how our country will invest: powerfully and decisively or in a fussy and despondent manner".

"Everything else depends on this question: our security, our future prosperity, the competitiveness of our economy, good work and education, and, last but not least, social cohesion in the country," he said.