FX.co ★ Germany Approves 2025 Budget, Marking Shift in Fiscal Policy

Germany's parliament sanctioned the country's first annual budget on Thursday, following comprehensive reforms earlier this year that eased fiscal constraints. This approval paves the way for unprecedented investments aimed at rejuvenating the economy, alongside a commitment to heightened defence expenditures. The 2025 budget earmarks nearly €116 billion (around $136.94 billion) for total investment, facilitated by a €500 billion infrastructure fund and a special exemption for defence spending from existing debt regulations, approved in March. "This marks a significant paradigm shift in German fiscal policy," Finance Minister Lars Klingbeil remarked to lawmakers prior to the vote in the Bundestag, Germany's lower parliamentary chamber, as reported by Reuters. The 2025 budget increases defence spending to 2.4% of GDP, although it still falls short of the new benchmark. Europe's largest economy has been operating on an interim budget this year, following the collapse of the previous ruling coalition last November, which precluded the timely passage of the 2025 financial plans.