German parliament passed debt rule reform

Reuters reports that the outgoing parliament of Germany on Tuesday passed the bill, proposing a massive rise in government borrowing and changes of the country’s debt rules. 

The conservatives led by the future German Chancellor Friedrich Merz and the Social Democrats have proposed changing borrowing rules and creating a fund of €500 billion ($546 billion) to develop the country's infrastructure. Such steps are aimed at strengthening defense and boosting GDP growth in Germany, which is Europe's largest economy.

To secure the necessary majority of two-thirds in the German parliament, the conservatives and the Social Democrats had to include last minute demands of the Greens party in their reform plan, Reuters says.

According to the agency, the legislation will now go to the Bundesrat, which represents 16 states of Germany. The vote on the bill is to take place on Friday. Officials of the conservatives and Social Democrats said they expect the legislation to be passed.