Friedrich Merz, Germany’s soon-to-be chancellor, has announced a strategy to exempt defence spending from limits on government borrowing.
The two political parties expected to form the next German government have agreed to loosen the country’s constitutional restrictions on borrowing, enabling €1 trillion or more in spending on defence and infrastructure.
It’s a major change in Germany’s debt-averse political culture. Intensifying debate over the debt brake throws into question the economic wisdom that has dominated Europe’s biggest economy and one of the world’s wealthiest countries.
Germany’s recent economic malaise has nonetheless fuelled calls for reform.
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source: https://www.euronews.com/business/2025/03/05/germany-to-ease-government-debt-limits-to-boost-economy-and-defence-spending
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