Germany long been known for its fiscal conservatism

(MENAFN) Germany has long been known for its fiscal conservatism, with its citizens particularly concerned about public debt. This attitude has often been shaped by the country’s painful history, particularly the hyperinflation that undermined the Weimar Republic in the early 20th century. Germans have clung to the idea that strict austerity is the key to preventing another economic collapse, but this approach, while deeply ingrained, has also led to economic stagnation in the past.

However, a historic shift is underway. For the first time, Germany's political, media, and academic elites are coming together to back significant government spending, including a massive increase in debt. The focus is largely on military spending, as the country prepares to rearm and support Ukraine in its conflict with Russia.

In a move that will alter Germany’s fiscal policies, the government plans to scrap the “debt brake,” a constitutional restriction on public debt, for military and defense spending. This includes not only rearmament but also civil defense and intelligence services. On top of that, Germany will take on an additional €500 billion of debt over the next 12 years, primarily for climate initiatives and infrastructure improvements.

Infrastructure investments are increasingly being justified not just for civilian needs but also for military purposes, with roads, railways, and bridges being seen as critical for logistics in times of conflict. The focus on military readiness and climate change reflects Germany's shifting priorities, but these changes raise concerns about the long-term economic consequences of such significant debt.

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