Germany's CDU, SPD, Greens Reach Historic Debt Deal on €1 Trillion Investment

German lawmakers have reached a landmark agreement to loosen the country's strict debt rules, allowing for significant increases in defense and infrastructure spending. The deal, involving the Christian Democratic Union (CDU), Social Democratic Party (SPD), and the Greens, proposes a €500 billion investment fund aimed at modernizing infrastructure and enhancing military capabilities. Key features include exempting defense spending above 1% of GDP from the constitutional 'debt brake' and allocating €100 billion for climate projects. The agreement is seen as a response to shifting global alliances and increasing doubts about U.S. commitments to European security. Financial markets reacted positively, with a rise in the euro and government bonds, but the plan still requires parliamentary approval. This development marks a significant departure from Germany's historically cautious fiscal policy, aiming to bolster economic growth and national defense.