Germany’s upper house of parliament passed a reform of its borrowing rules and allocated a 500-billion-euro ($542 billion) fund to revamp the country’s infrastructure on Friday. The constitutional amendment loosens the “debt brake,” allowing for unlimited spending on defense and security.
The change is part of a centrist coalition effort between conservatives and the SPD party, who are in talks to form a new government after last month’s election. They sought to pass the legislation before the next parliament started on March 25, fearing it could be blocked by far-right and far-left lawmakers.
Chancellor-in-waiting Friedrich Merz defended the tight timetable, citing concerns over a rapidly changing geopolitical situation. The move is expected to revive Europe’s largest economy.
Source: https://www.cnbc.com/2025/03/21