Germany’s Fiscal Breakout is Inflationary

Germany’s newly unleashed spending power could soon transform Europe’s economic landscape—just as the eurozone grapples with lukewarm inflation and ongoing monetary easing. This expanded fiscal firepower marks a pivotal shift, but its immediate impact on prices remains murky. Rather than sending inflation skyrocketing, Berlin’s spending spree might introduce a brief phase of tempered price growth before underlying pressures start to build in 2026.