A two-thirds majority of Bundestag parliamentarians, required for the change, approved the vote on Tuesday.

The law will exempt spending on defence and security from Germany’s strict debt rules, and create a €500bn ($547bn; £420bn) infrastructure fund.

This vote is a historic move for traditionally debt-shy Germany, and could be hugely significant for Europe, as Russia’s full-scale invasion of Ukraine grinds on, and after US President Donald Trump signalled an uncertain commitment to Nato and Europe’s defence.

However, state government representatives in the upper house, the Bundesrat, still need to approve the moves – also by a two-thirds majority – before they officially become law. That vote is set for Friday.

Friedrich Merz, the man behind these plans and who is expected to soon be confirmed as Germany’s new chancellor, told the lower house during Tuesday’s debate that the country had “felt a false sense of security” for the past decade.

“The decision we are taking today… can be nothing less than the first major step towards a new European defence community,” he said, adding that it includes countries that are “not members of the European Union”.

Despite fears the vote would be tight, lawmakers in the end voted in favour of the changes by 513 to 207 – comfortably over the two-thirds majority required.

Under the measure, defence spending will be exempt from Germany’s so-called debt brake – a law in the country’s constitution that strictly limits federal government borrowing to just 0.35% of Germany’s GDP.

Merz, whose CDU party won Germany’s general election last month, proposed the measures swiftly after the win.

In an interview on Sunday he specifically mentioned fears that the US could pull back from defending Europe and Trump’s talks with Russian President Vladimir Putin, saying that the “situation has worsened in recent weeks”.

“That is why we have to act fast,” Merz told public broadcaster ARD.

It is a significant political win for Merz, who will, when he takes power as chancellor, now have access to hundreds of billions of euros to invest in the state – what some in Germany have called a “fiscal bazooka”.

It is also an important moment for Ukraine.

The defence plans approved today by the Bundestag also allow spending on aid for states “attacked in violation of international law” to be exempt from the debt brake.

That will enable outgoing chancellor Olaf Scholz to release €3bn in aid to Ukraine as early as next week.

Merz chose to push the changes through the old parliament, knowing the vote arithmetic was more favourable now than after 25 March, when the new parliament session begins.

The far-right AFD and far-left Linke, which both performed well in February’s election, oppose Merz’s plans.

Merz has still not agreed a coalition deal to govern Germany after his election win, and has announced ambitious plans to have a government in place by Easter.

Coalition negotiations in Germany however can drag on for months at a time.

The stopgap funding bill passed in the Senate 54-46, as two Democrats joined all but one Republican senator in voting yes. President Donald Trump must now sign it into law before the Friday midnight deadline.

The key vote came earlier when some Senate Democrats, after fierce debate, allowed the measure to pass a procedural hurdle.

The Senate minority leader, Democrat Chuck Schumer, and nine others broke with their colleagues to vote to advance the bill to its final Friday evening vote.

Two Democrats – Senator Jeanyne Shaheen and Independent Senator Angus King of Maine – voted in favour of its final passage. Schumer voted “no”.

On Thursday, he announced he would vote to allow the measure to move forward, saying although it wasn’t a bill he liked, he believed triggering a shutdown would be a worse result.

Representative Alexandria Ocasio Cortez called Schumer’s willingness to let the spending bill proceed a “huge slap in the face”, adding that there is a “wide sense of betrayal” among the party, according to the BBC’s US partner CBS News.

She said supporting the bill “codifies the chaos and the reckless cuts that Elon Musk has been pursuing”, and that Senate Democrats who voted yes would be empowering “the robbing of our federal government in order to finance tax cuts for billionaires”.

The Democrats had agonised over whether to support the measure, and eventually pushed for a 30-day continuing resolution that was unlikely to earn enough support to pass.

Senator Ted Cruz accused the Democrats of conducting “political theater” and praised the bill’s passage.

“The government is funded, let’s get back to work,” he said in a statement.

The passage is a victory for Trump and congressional Republicans.

On Friday morning, Trump offered rare bipartisan praise of Schumer’s decision to let the bill advance, writing that “a non pass would be a Country destroyer, approval will lead us to new heights”.

The legislation would keep much of the federal funding levels from the Biden Administration in place, with some key changes.

It increases military spending by $6bn (£4.6bn), for items like border security, veterans healthcare, and military spending. But would cut non-defence funding by about $13bn.

Local officials in Washington DC had feared the bill would result in a $1bn cut in federal funds for the city over the next six months. However, the Senate approved a separate bill that kept its current operating budget intact, the New York Times reported.

Senate Minority Leader Chuck Schumer announced his reversal on Thursday, after vowing he and other Democrats would block the bill, which would fund the government through September.

It is possible a handful of other Democrats might now elect to vote to approve the measure, though it remains unclear.

Democrats face two options: Help Republicans pass the bill or stand their ground and oppose it. If they oppose the bill, it is likely they would take the brunt of the blame for the shutdown, which would start at 23:59 ET on Friday.

“There are no winners in a government shutdown,” Schumer said in his announcement on the Senate floor.

“It’s not really a decision, it’s a Hobson’s choice: Either proceed with the bill before us or risk Donald Trump throwing America into the chaos of a shutdown.

“This in my view is no choice at all.”

He called the Republican-led funding bill deeply partisan but voiced concerns about a shutdown.

He said it would give Trump and Elon Musk, who have been leading an effort to slash federal spending, a “carte blanche to destroy vital government services at a significantly faster rate than they can right now”.

Votes on the measure are expected on Friday afternoon.

Although Democrats are in the minority in the Senate, they have a procedural ace in the hole. Senate rules require 60 votes out its 100-member chamber to pass most legislation.

So while the 47 Democrats and left-leaning independents don’t have the numbers to approve their own funding bill, they can block the Republican measure if they mostly stick together.

That’s exactly the course many liberals, desperate for Democrats to take a more forceful stand against the Trump administration, have insisted the party pursue.

The political brinksmanship has its risks.

Some conservatives would relish a government shutdown that suspends programmes and services they see as wasteful or counterproductive. Musk himself has said that such a scenario would help his team better identify “non-essential” government functions that they could then permanently end as part of his Department of Government Efficiency.

Republicans would also be quick to blame any shutdown, and the disruptions it causes, on the Democrats. And an extended shutdown would directly affect the very workers and programmes that Democrats are trying to protect.

On Wednesday, the Republican-controlled House of Representatives passed the bill that keeps the lights on through September – with strings attached.

The new resolution boosts military spending by $6bn (£4.6bn) over current levels, while slashing $13bn from non-defence programmes and allowing more money for border enforcement.

It also contains a provision that makes it harder for Democrats to force a vote on rescinding Trump’s tariffs on Canada, Mexico and China.

Many Democrats have said they would not support the House resolution and demanded the ability to modify it.

The 217-215 vote was seen as a key early test for Republican House speaker Mike Johnson, who cancelled an earlier vote as it appeared he did not have enough support.

Several Republicans wanted more fiscal discipline from a budget that includes $4.5 trillion in tax cuts, funded partially by spending cuts but also by potentially increasing the US government’s substantial debt pile.

But the bill eventually passed along party lines, with all Democrats voting against and just one Republican opposing it.

That Republican was Thomas Massie of Kentucky, a prominent fiscal hawk who wanted deeper spending cuts. One Democrat did not vote.

The House budget seeks $2 trillion in spending cuts over the next 10 years to pay for President Trump’s agenda. It includes more than $100bn in new spending on immigration enforcement and the military.

It would also extend tax breaks passed during his first term in office, which are due to expire at the end of the year.

However there are still a number of steps the spending plan must go through in order to become law.

The budget will have to be merged with a separate budget which is under consideration by the US Senate, in a process called reconciliation.

And even if both chambers ultimately agree on a spending plan, many finer details will need to be negotiated before it can be sent to President Trump’s desk to be signed.

House Republican leaders initially delayed Tuesday’s vote when it was unclear whether they would have enough support to pass the measure.

Speaker Johnson and the second most senior House Republican, Steve Scalise, spent hours working to convince wavering party members to back the plan which, as well as tax cuts, would fund border security measures, deportations and military spending.

Trump personally called some of the holdouts to encourage them to pass the bill, the two Republican leaders said.

“Trump helped us with a number of members,” Scalise told reporters. “Talking to anybody that we asked that really needed to clarify things.”

Three of the four party holdouts who had been initially seen as firm no votes – Representatives Tim Burchett, Victoria Spartz and Warren Davidson – ultimately voted in favour.

“We have a lot of hard work ahead of us, but we are going to deliver the American First agenda,” House Speaker Mike Johnson told reporters after the vote.

“We’re going to celebrate tonight, and we’ll roll up our sleeves and get right back in the morning.”

Democrats lined up to criticise the budget as a tax cut mostly for the wealthy, which they said would hurt low-income families who rely on the government-funded health care programme Medicaid.

The party worked to get as many members in the chamber for the crucial vote, with Representative Brittany Petterson arriving with her son while on maternity leave.

The Senate will be under pressure to take up the House’s spending framework because President Trump has endorsed it, despite their separate bill which was introduced last week.