Germany creates massive special funds for defence and infrastructure

Germany's political leaders are discussing the creation of two special funds worth up to one trillion euros to bolster both defence and infrastructure, reflecting growing pressure to secure the country's military capabilities and modernise its economy, according to sources (via Reuters).

With negotiations underway to form a new government, economists advising the likely coalition suggest that 400 billion euros should be allocated to defence, while infrastructure investments may require up to 500 billion euros.

The urgency intensified following a tense meeting between Ukrainian President Volodymyr Zelensky and United States President Donald Trump, which heightened concerns in Berlin over regional security and support for Ukraine.

Talks between the Christian Democrats, their Bavarian allies, and the Social Democrats are ongoing, with leaders aiming for a government deal by Easter, though no final decisions have been reached. For now, it remains to be seen whether political consensus will translate into swift financial action.