AfD leader says Germany has performed ‘death blow to the euro’

(MENAFN) Alice Weidel, co-leader of the Alternative for Germany (AfD) party, has criticized Berlin's recent move to reform its national debt rules to increase military spending, claiming it threatens the economic stability of the euro area. Her remarks came after the Bundestag passed a measure that will allow the federal government to significantly raise state borrowing for defense and infrastructure.

The initiative was approved by 513 lawmakers, with 207 voting against it. Weidel described the reform as a “death blow” to the euro, warning that it would lead to a significant devaluation in the coming years. She expressed concern that the measure, which involves taking on "gigantic debt," would heavily impact future generations and damage Germany's financial stability.

The reform amends Germany’s constitutionally mandated fiscal rules, specifically allowing more borrowing to fund the Bundeswehr, Germany's military. It includes a €500 billion ($548 billion) fund for infrastructure and climate initiatives, with a portion dedicated to addressing climate change. The changes also exempt spending above 1% of GDP from the "debt brake," a rule introduced in 2009 to limit budget deficits to 0.35% of GDP.

The package, still needing approval from the Bundesrat on Friday, could result in the removal of fiscal restrictions for significant military and infrastructure spending, marking a major shift in Germany's economic policy. Weidel also predicted that the country could lose its AAA credit rating as a result.

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