Germany Approves Historic €1 Trillion Spending Surge

Germany's parliament has approved a historic spending package aimed at boosting defense and infrastructure, marking a significant shift from decades of fiscal conservatism. The Bundestag's decision, led by prospective Chancellor Friedrich Merz and supported by the Social Democrats, allows for over €1 trillion in investments, including a €533 billion fund for infrastructure improvements. This move comes in response to rising geopolitical threats, particularly from Russia, as lawmakers seek to enhance Germany's military capabilities. Critics, however, have expressed concern over the easing of the constitutionally enshrined 'debt brake,' with a recent poll indicating that a majority of voters feel betrayed by Merz's broken campaign promise on fiscal restraint. The legislation has garnered bipartisan support, reflecting a broader consensus on the need for increased defense spending amid changing security dynamics in Europe. The package is expected to pass the Bundesrat, the upper house, further solidifying this new fiscal direction.