With the anticipated leadership of Friedrich Merz, Germany is poised to break from its traditional fiscal restraint by relaxing borrowing limits to boost military and infrastructure budgets. This move addresses growing domestic fears of a surging far-right, potential Russian aggression, and diminished U.S. security guarantees. Merz's coalition aims to demonstrate an ability to act decisively, departing from a history of political inertia, and responds to external threats with an aggressive financial agenda focused on national security and economic stimulation through increased spending.
Ever since the Berlin Wall fell and the country reunited, Germans could be expected to keep budget deficits relatively low, military spending even lower, and politics at a plodding pace.
The next German government is smashing all those traditions before it even takes office.
In view of the threat to our freedom and to peace on our continent, the mantra for our defense has to be, whatever it takes,' Mr. Merz said.
The agreement... is a rapid-fire attempt to counter the fears that stalk mainstream German political parties.
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