Germany’s €1 Trillion Defense and Infrastructure Plan: A New Era for Europe?
The German Bundestag approved a constitutional amendment allowing up to €1 trillion in national debt, primarily to fund defense (€500 billion) and infrastructure (€500 billion) projects over the next decade. This decision, spurred by the war in Ukraine and perceived threats from Russia, reverses Germany’s strict “debt brake” policy. The funds will modernize the military, increase aid to Ukraine, and address significant infrastructure deficiencies. However, this substantial spending increase raises concerns about potential long-term economic stability and increased borrowing costs.
John Q. Hosedrinker