Germany Loosens Fiscal Chains to Transform European Defense

Germany will unlock hundreds of billions of euros for defense and infrastructure investments in a dramatic shift that upends its ironclad controls on government borrowing.

Chancellor-in-waiting Friedrich Merz said on Tuesday night that Germany would amend the constitution to exempt defense and security outlays from limits on fiscal spending and do “whatever it takes” to defend the country. He said that with the backing of his likely coalition partners he is also planning a €500 billion ($528 billion) infrastructure fund to invest in priorities such as transportation, energy grids and housing over 10 years.