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 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.

Germany’s Green party rejected a draft debt-financed package that would unleash hundreds billions of euros in defense and infrastructure spending, potentially leaving chancellor-in-waiting Friedrich Merz without a supermajority needed to pass the legislation.