Germany’s future coalition partners to relax debt rules to boost defence budget
GuardianMAR 15
Germany to Relax Debt Brake, Boost Defense Spending
Above: Markus Söder, leader of the CSU, Saskia Eskeen, co-chair of the SPD, Friedrich Merz, leader of the CDU and Germany's likely next chancellor, and Lars Klingbeil, co-chair of the SPD, arrive at the press conference in Berlin on March 4, 2025. Image copyright: Kay Nietfeld/picture alliance/Contributor via Getty Images
The Spin
Pro-establishment narrative
This is a much-welcomed fiscal U-turn that represents a necessary and bold response to transform the outlook of the country's infrastructure and economy as well as of European defense — and markets' response illustrates that. Germany has been on the edge of a technical recession for years now, it's about time for a fiscal stimulus.
Establishment-critical narrative
It's certain that Germany must increase military spending and restructure its economy — and it's indeed rational to stop being the only fiscally responsible country in the EU — but this shift will hurt eurozone as its anchor is on track to join the high-debt club. Yields on German debt are already on the rise, and trouble is coming for Europe.