Germany's New Debt Strategy: Ambitious Steps for Defense and Infrastructure

Friedrich Merz, the probable next chancellor of Germany, received approval for bold plans to adjust stringent debt rules to boost defense spending and infrastructure investment. The plan involves lobbying with the Greens, easing borrowing restrictions, and aims to fund defense and climate-related projects.

Germany's likely upcoming chancellor, Friedrich Merz, secured parliamentary backing for ambitious strategies to revise the nation's strict debt regulations. His plans aim to enhance defense expenditures as skepticism grows over the trans-Atlantic alliance's durability, while proposing a substantial investment fund for Germany's aging infrastructure.

Merz's proposal passed a key hurdle as the outgoing parliament endorsed it with a 513-207 vote. This development paves the path for a coalition between Merz's center-right Union bloc and the center-left Social Democrats, even though negotiations continue.

The proposal aims to exempt defense spending from existing debt constraints, carving out a 500 billion-euro investment fund over 12 years to revitalize the economy. Challenges remain as the proposed reforms need widespread support among lawmakers and the public.

(With inputs from agencies.)