Germany Eyes Swift Moves on Defence, Investors Sniff Bonanza
Germany's likely next chancellor, Friedrich Merz, is considering setting up special funds worth nearly a trillion euros to finance urgent defence and infrastructure spending, prompting double-digit percentage rises in shares in defence contractors. The proposed funds would amount to 20% of German GDP, with economists proposing sums of 400 billion euros and 500 billion euros respectively. This fiscal sea change would be unprecedented since the Cold War, sending Europe's defence stocks soaring.
- The proposed defence fund highlights Germany's recognition of its need for a significant military overhaul, one that has been long overdue given its history of being a defence laggard.
- What implications will this sudden surge in defence spending have on Germany's relationship with NATO and its role in global security initiatives?