Germany’s Debt Brake Unravels: Markets Rejoice, Economists Fret

After decades spent as Europe’s fiscal disciplinarian, Germany’s pivot toward bold deficit spending signals more than just a domestic shift; it could redefine Europe’s economic trajectory for a generation. As the coalition government’s plans to loosen the stringent debt brake take shape, investors are responding with cautious optimism, sensing the opportunity for genuine economic revival amid years of stagnation. Yet, a vocal minority of fiscal hawks worry that abandoning fiscal prudence risks Germany’s cherished status as Europe’s ultimate safe haven.