Indonesia–U.S. Tariff Talks Near Completion as Both Sides Push for Year-End Deal 
U.S. Dollar Slides for Third Straight Week as Rate Cut Expectations Boost Euro and Pound 
Wall Street Futures Dip as Broadcom Slides, Tech Weighed Down Despite Dovish Fed Signals 
Wall Street Futures Slip as Oracle Earnings Miss Reignites AI Spending Concerns 
BOJ Expected to Deliver December Rate Hike as Economists See Borrowing Costs Rising Through 2025 
Gold Prices Hold Firm as Markets Await Fed Rate Cut; Silver Surges to Record High 
Asian Stocks Slip Ahead of Fed Decision as China Deflation Concerns Deepen 
Asian Stocks Rally as Tech Rebounds, China Lags on Nvidia Competition Concerns 
ADB Approves $400 Million Loan to Boost Ease of Doing Business in the Philippines 
Oil Prices Edge Higher as U.S. Seizes Sanctioned Venezuelan Tanker 
Gold Prices Dip as Markets Absorb Dovish Fed Outlook; Silver Eases After Record High 
Japan Weighs New Tax Breaks to Boost Corporate Investment Amid Spending Debate 
Asian Stocks Slip as Oracle Earnings Miss Sparks AI Profitability Concerns 
Asian Currencies Steady as Fed Delivers Hawkish Rate Cut; Aussie and Rupee Under Pressure 
Australia’s Labour Market Weakens as November Employment Drops Sharply 
Germany is moving forward with a historic fiscal package to expand public spending and reform its debt rules. The CDU/CSU and SPD have agreed on a multi-year financial framework, including increased investments in defense and infrastructure. To implement these changes, constitutional amendments are required, sparking political debates, particularly with the Green Party.
A key component of the package is revising the debt brake, a constitutional rule limiting deficits. The proposed reform excludes defense spending above 1% of GDP, potentially unlocking €400 billion (9.3% of GDP) over the next decade. While this move strengthens Germany’s military amid global tensions, the Greens advocate raising the exclusion threshold to 1.5% of GDP and expanding the definition to include cyber and energy security.
Beyond defense, a €500 billion (11.6% of GDP) special fund is set to modernize infrastructure, transport, housing, and decarbonization efforts over the next ten years. However, concerns exist over whether this investment is truly additional or merely reallocates existing budgetary resources.
The package requires a two-thirds majority in both the Bundestag and Bundesrat. Since the coalition lacks the votes in the new Bundestag, the government aims to pass the reforms before the next parliament convenes on March 25. Support from the FDP or Free Voters is essential for Bundesrat approval.
Economically, the increased spending could boost GDP growth by 0.8 percentage points in 2026. While Germany’s debt-to-GDP ratio could rise from 62.9% to 84%, expected economic growth may offset the increase. The European Commission’s ReArm Europe proposal could also allow defense spending exemptions, easing EU deficit constraints.
