Germany’s upper parliamentary chamber, the Bundesrat, is set to vote on Friday on a sweeping spending plan designed to jumpstart economic growth and bolster military capabilities amid shifting European security concerns. This vote marks the final major step before the package becomes law, injecting billions into an economy that has shrunk for two consecutive years.

Earlier this week, the Bundestag—the lower house of parliament—greenlit the legislation after the conservatives and Social Democrats (SPD) secured the Greens’ backing for a two-thirds majority. With strong support, the package is widely expected to clear the Bundesrat.

The initiative establishes a €500 billion ($546 billion) fund to invest in infrastructure over the next 12 years while also loosening Germany’s strict borrowing rules—the so-called debt brake—to permit greater defense spending.

The conservatives and SPD, currently negotiating a coalition following last month’s election, are working swiftly to pass the measure through the outgoing parliament, concerned that the next Bundestag—where far-left and far-right factions will have more influence—could obstruct it after March 25.

Chancellor-in-waiting Friedrich Merz has underscored the urgency of the legislation, citing geopolitical uncertainty, particularly the evolving stance of the United States under President Donald Trump. European leaders worry about increased vulnerabilities amid a more aggressive Russia and a rising China.

If the Bundesrat approves the measure, it would mark a significant political victory for Merz even before he formally assumes office. The 69-year-old conservative leader, who triumphed in last month’s election, aims to finalize coalition negotiations with the SPD by Easter.