The German parliament has voted in favour of a huge fiscal package and changes to the debt brake. It's historic, and this is what it means for Germany and the wider world.
A political deal in Berlin suggests a key fiscal package and changes to the debt brake will receive the needed two-thirds majority at next week's vote. The risk of failure has clearly come down to close to, but not entirely yet, zero.
Developments over the last 24 hours suggest the risk has increased that CDU/CSU and SPD will not get a 2/3 majority for their draft law to implement a fiscal stimulus package.
That was one for the books—a week where markets whipsawed between panic and less panicked, leaving traders dazed and scrambling to make sense of the shifting macro landscape.
Instead of focusing on the production of real things, Germany has turned to its Keynesian money-printer-touting bankers for unlimited stimulus of the economy. Now the cracks are starting to show in their currency.
Another bazooka, this time from Germany, of all places. The mere thought of it has been enough to send the German bond market into a tailspin and sending yields to nearly their highest in fourteen years.
German inflation remained unchanged in February. Together with French and Italian inflation data, German inflation numbers should pave the way for a rate cut next week by the European Central Bank.
From defense to infrastructure spending to reviving Europe's economic powerhouse, the challenges facing the likely new German Chancellor, Friedrich Merz, are huge.
