Germany's Greens vowed to block plans by likely next chancellor Friedrich Merz for a massive increase in state borrowing but left room for compromise on Monday on measures to revamp the military and revive growth in Europe's biggest economy.

German election winner Friedrich Merz's conservatives and the Social Democrats (SPD) have concluded preliminary talks towards forming a coalition government, heads of the parties said on Saturday.

Germany’s Green party rejected a debt-financed package that would unleash hundreds billions of euros in defense and infrastructure spending, potentially imperiling the flagship policy of chancellor-in-waiting Friedrich Merz.

Party officials reject €500bn infrastructure fund plan and change to debt borrowing rules to fund defence spending

The CDU and SPD, likely coalition partners in Germany's next government, want to relax the debt brake for spending on defense and infrastructure. But the Greens said this would not invest enough in climate protection.

Germany's Green party on Monday threatened to torpedo plans put forward by likely next chancellor Friedrich Merz to invest hundreds of billions in defence and infrastructure. The proposed constitutional changes to ease strict borrowing limits in the area of defence and establish a 500-billion-euro ($542-billion) fund for infrastructure were described as historic when they were presented last week.