Germany's New Fiscal Strategy Exempts Defence Spending Over 1% GDP

Germany's three major political parties have agreed on a reformed debt brake that exempts defence spending above 1% of GDP. The deal aims to address concerns, including those of the Greens, by possibly expanding defence spending to civil defence and intelligence.

Germany's major political parties have reached a consensus to modify the nation's debt brake, exempting defence spending exceeding 1% of GDP. This strategic shift comes as election winner Friedrich Merz engages stakeholders to refine the country's fiscal approach.

The specifics of the agreement remain undisclosed, but this move highlights a strategic alignment among the leading parties regarding national security expenses. Under the proposal, the definition of defence spending may also be broadened to encompass civil defence and intelligence sectors, addressing the concerns of various factions.

Merz's proactive engagement with the Greens reflects a broader strategy to accommodate diverse political views while strengthening Germany's defensive capabilities through enhanced fiscal policies.

(With inputs from agencies.)