Germany Approves Historic €1 Trillion Debt Package for Defense and Infrastructure

The plan, set to unfold over a decade, raises debt-to-GDP concerns while aiming to strengthen economic competitiveness and address climate priorities.

• The Bundestag has approved a €1 trillion debt package, with €500 billion allocated to infrastructure and €100 billion directed to a climate fund.
• Germany's debt-to-GDP ratio is projected to rise to 80-90% over the next decade, up from the current 63%, raising concerns about financial stability.
• Critics, including youth advocacy groups, warn of intergenerational fairness issues and long-term financial burdens for future generations.
• The package will be financed through government bonds, potentially increasing interest payments by €250-400 billion over ten years, depending on market conditions.
• Supporters argue the investments could enhance Germany's economic competitiveness, but repayment timelines remain unclear, potentially extending into the second half of the century.

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