Germany's €500bn fiscal initiative and its European impact​

Germany's approval of a €500 billion infrastructure fund, alongside increased defence spending exempt from its constitutional debt brake, marks a significant departure from its longstanding fiscal conservatism. This initiative, representing 11.6% of Germany's 2024 GDP, aligns with the European Commission’s ‘ReArm Europe Plan’, which facilitates over €800bn in defence spending. The move is expected to have substantial effects on European bond markets, potentially leading to increased bond issuances. While some experts view this as a positive development for certain sectors, concerns remain about...