BERLIN - German parties seeking to form the next government agreed on Tuesday to set up a 500-billion-euro (about $531 billion) infrastructure fund and to exempt defense spending from constitutionally enshrined debt brake.

The proposal by Germany's CDU/CSU union and the Social Democratic Party (SPD) aims to exempt defense spending above 1 percent of GDP from the debt brake's limitations.

ALSO READ: Car drives into crowd in German city of Mannheim, killing two

The constitutional debt brake was introduced in 2009 to limit the country's budget deficit.

READ MORE: German conservatives, Social Democrats to start exploratory talks on Friday

According to the parties' announcement, a motion to amend the Basic Law will be introduced next week in the Bundestag, the lower house of parliament. A two-thirds majority in the Bundestag will be needed to approve constitutional amendments.

READ MORE: German election victor Merz plans pivot from US as coalition talks loom

The CDU/CSU won the country's federal election and is negotiating with the SPD to form a new government.

Germany and Europe must rapidly strengthen their defense capabilities, said Friedrich Merz, chairman of the Christian Democratic Union (CDU), "whatever it takes."