Turning point ‘Whatever it takes’

Article by Carsten Klude

For years, the debt brake was considered untouchable - but now there are signs of a turnaround. Politicians are discussing investments worth billions that could permanently change Germany's economic foundations. A 500 billion euro investment fund is to modernize the infrastructure, while higher defence spending is being reprioritized in light of the geopolitical situation. But what does this mean for growth, interest rates and the capital market?

While supporters are banking on an urgently needed economic stimulus, critics warn of rising national debt and higher financing costs. What consequences would this change in fiscal policy have for the economy, markets and investors?

In our current issue of “Economic Situation & Strategy”, we analyze the possible effects and classify the plans in economic terms.