Whether this is posturing or principles,  Germany's €500 billion spending bazooka is on the ropes this morning after Germany’s Green party rejected the draft debt-financed package, potentially leaving chancellor-in-waiting Friedrich Merz without a supermajority needed to pass the legislation.

"We will recommend to the members of the Green parliamentary group not to agree to these changes," Katharina Droege, the party's leader in the Bundestag, told reporters. 

In the new Bundestag, the far-right Alternative for Germany and anti-capitalist Left party will hold enough votes to block a two-thirds vote. 

Thus Merz and the SPD had sought a vote in the outgoing parliament next week.

Green leaders blasted the incoming coalition’s decision to leave the party largely out of discussions and ignoring Green priorities such as climate action.

Bloomberg reports that Droege said the party was prepared to negotiate a “real” reform to constitutional debt restrictions, though preferably when the new lower house, or Bundestag, meets after March 25.

The euro oscillated modestly on the news, suggesting the market sees through the headline as posturing by a party in search of more climate-friendly concessions in the package...

Bund yields are leaking lower (as the odds of a deal are re-rated lower - albeit marginally)...

As UBS notes, this sounds very much like negotiations ahead of talks between the Greens and the CDU later in the day. 

Notice it says they won't back the "draft" plan – so the talks could lead to changes in the draft. It's going to be a week of a lot of headline risk.