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Germany to loosen debt limit to allow more defence, infrastructure spending

The approval in the Bundestag gives chancellor-in-waiting Friedrich Merz a windfall of hundreds of billions of euros to ramp up investment after two years of economic contraction.



Germany's parliament approved loosening debt limits to increase spending on defense and infrastructure, creating a €500 billion fund. This reverses fiscal conservatism amid pressure for increased defense spending and economic growth. The DAX index and euro saw slight reactions, while some critics warn of potential risks to Germany's AAA rating.

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