Germany is easing the "debt brake" for investments in defense and infrastructure: the president has signed the law
Kyiv • UNN
The German President has signed a relaxation of the debt limit to increase spending on defense and infrastructure projects. A special fund will be created to finance infrastructure repairs and climate protection measures.
German President Frank-Walter Steinmeier on Saturday signed a landmark easing of the country's debt limit - the "debt brake" - to increase defense spending and a 500 billion euro financial package for infrastructure and climate initiatives, his office said, UNN reports citing dpa.
Details
This means that the changes, approved by parliament earlier this week, overcome the last obstacle and will take effect after their publication in the Federal Law Gazette of Germany.
The move loosens Germany's constitutionally enshrined "debt brake," which sets strict limits on government spending on defense, civil protection, intelligence and cybersecurity.
Any such spending in excess of 1% of Germany's gross domestic product (GDP) can now be financed by new borrowing.
In addition, a special fund will be created, exempt from the debt brake, and filled with loans of up to €500 billion.
The fund will be used to finance repairs to Germany's infrastructure, with €100 billion earmarked for the federal states and another €100 billion earmarked for climate protection measures and the transition to a green economy.
Conservative leader Friedrich Merz, the country's presumed next chancellor, rushed the vote in the outgoing parliament, anticipating greater difficulty in gaining support after the newly elected lawmakers take office next week.
On Friday, Merz defended his decision, stressing the need for swift action in light of geopolitical and security concerns, including the ongoing war in Ukraine and changes in U.S. policy.
