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Germany Approves Historic Debt Brake Reform for Defense and Infrastructure

The Bundesrat's approval clears the last parliamentary hurdle for a constitutional amendment enabling €500 billion in borrowing for modernization and security.

  • The Bundesrat approved the amendment with a two-thirds majority, following the Bundestag's earlier vote, allowing significant borrowing for defense, civil protection, and infrastructure.
  • The reform establishes a €500 billion special fund to address infrastructure deficits, with €100 billion allocated to states and another €100 billion for climate initiatives.
  • The law now awaits review and signing by Bundespräsident Frank-Walter Steinmeier to ensure its constitutional compliance before implementation.
  • Critics highlight concerns over the lack of a clear debt repayment plan and the potential long-term financial risks associated with the borrowing.
  • Supporters frame the amendment as a necessary response to global security challenges and a step toward modernizing Germany's economy and infrastructure.
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