The constitutionally enshrined debt brake restricts budget deficits to 0.35% of gross domestic product, though that excludes top-ups of the special fund for defence or the creation of a new special fund.

However, both the AfD and the Left oppose military aid to Ukraine and with their new-found strength in the Bundestag lower house they could veto increased contributions to the defence fund, creating tensions with Germany’s Nato allies, including the Trump administration which wants Europe to spend much more.

German conservatives under likely next chancellor Friedrich Merz vowed today to move quickly to try to form a coalition after winning the most votes in a national election, but gains by both the AfD and far-left parties will complicate his task.

Holger Schmieding, chief economist at Berenberg, said that Germany may struggle to find the fiscal space to raise spending on defence while also easing the tax burden for workers and firms.

“A failure to ramp up military spending could get Germany into deep trouble with its Nato partners,” Schmieding said.

“By infuriating US President Donald Trump, it could also add to the risk of a US-EU trade war.”

The Left would be open to loosening the debt brake but not to allow greater defence spending, economists say.

“The Left would like to ditch the debt brake. However, its agenda – soak the rich, spend more on welfare and less on defence – is the very opposite of the Merz agenda,” said Carsten Brzeski, global head of macro at ING.

The most likely outcome of yesterday’s election is a coalition of Merz’s conservative bloc and the Social Democrats (SPD), who came in third, after the AfD surged to a historic second place.