Germany reaches a historic agreement involving leading political parties to allocate up to €1 trillion over a decade for defense and infrastructure. The plan includes provisions for spending above 1% of GDP exempt from the constitutional 'debt brake'. A €500 billion infrastructure fund aims to support projects, contingent upon Green party approval, which was secured by channeling €100 billion into climate initiatives. Additionally, the definition of 'defense' is broadened to include civil defense and international assistance, pending final approval by the Bundestag and Bundesrat.
Merkel's administration's 'debt brake' has traditionally constrained Germany's fiscal policy; this historic deal, however, now permits significant investment in defense and infrastructure.
With threats of losing Green support, CDU's Merz committed €100 billion for the Climate Transformation Fund, aligning defense spending with climate initiatives.
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