#Budget constraints or spending stimulus?

"#Germany’s Chancellor-to-be Friedrich Merz (after winning the recent election) has adopted the same story. In a complete about-face from his election campaign, when he opposed any extra fiscal spending in order to ‘balance’ the government books, he is now promoting a plan to inject hundreds of billions in extra funding into Germany’s military and infrastructure, designed to revive and re-arm Europe’s largest economy. A new provision would exempt defence spending above 1 per cent of GDP from the “debt brake” that caps government borrowing, allowing Germany to raise an unlimited amount of debt to fund its armed forces and to provide military assistance to Ukraine. And he plans to introduce a constitutional amendment to set up a €500bn fund for infrastructure, which would run over ten years. Suddenly, there is plenty of cash and borrowing to be made available for arms and military ventures."

https://thenextrecession.wordpress.com/2025/03/05/trumps-little-disturbance/

"Italy and Spain support issuing common EU debt — which is effectively free money — for defense."

EU member states not wanting to have any outsider saying what you should do include Poland, Finland.

https://www.politico.eu/article/eu-leaders-fear-european-commission-power-grab-defense-donald-trumps-exit/

"Lacking enough oil and gas to power itself, for 75 years the continent has been squeezed by the three centers of hydrocarbon power: the US, Russia, and the Gulf Kingdoms.
"Today, this means that in order to be free from authoritarian blackmail—whether Putin’s or Trump’s—#Europe must go green."

"The energy transition and defense both require industrial policy. In each, to be effective means choosing what exactly to make, and what exactly to buy": https://www.phenomenalworld.org/analysis/europe-enters-its-metal-era/