Chancellor-in-waiting Friedrich Merz urged sceptical lawmakers on Thursday to back his proposals for a massive increase in state borrowing, framing them as a test for Germany to stand tall on the world stage and safeguard European security.

A senior ally of Germany's likely next chancellor Friedrich Merz on Tuesday was optimistic about securing support for a massive increase in state borrowing this month, seeing the basis for a deal on defence with the Greens party after emergency talks.

Germany's outgoing lower house of parliament will hold a special session on Thursday to debate a 500 billion euro fund for infrastructure and sweeping changes to borrowing rules in Europe's largest economy to bolster defence.

Germany's likely next leader Friedrich Merz is set Thursday to defend his unprecedented plans to massively ramp up defence and infrastructure spending in parliament as lawmakers begin debating the proposals.

Germany's Greens may refuse to back plans by likely next chancellor Friedrich Merz for a massive increase in state borrowing, with a party source on Monday warning "approval is becoming less likely with each passing day".

Germany's likely next leader Friedrich Merz said Thursday urgent action was needed to boost the country's under-resourced military and ailing economy, as he defended plans for a spending bonanza durin