Defense Spending Uprising! Germany's Fiscal Force Awakens?

A New Hope...For Defense?

Hmm turbulent times these are. News from Germany it brings. Spend more on defense NATO wants yes. Two percent of GDP Germany spends now a small fish in a big pond it is. But five percent the new target they say. A challenge this is. A surprise to be sure but an unwelcome one.

Debt Brake Blues Feel I!

The Force is strong but the budget is weak hmmm? Borrow more Germany must to reach these goals they say. A debt brake they have but broken it may be. Exemptions sought for defense they are. Fiscal rules bent they might get. "Do or do not there is no try," but try they must carefully they should. A financial tightrope this is the risk of falling high is.

Taxes Rising Patience Weary?

Tax hikes a possibility they whisper. Cuts elsewhere likely too. Distribution conflicts they foresee. "Fear is the path to the dark side," and fear of higher taxes many feel. Balance the Force they must and the budget too. Easy this will not be patience they need young Padawans.

Infrastructure Fund...A Diversion?

A 500 billion euro fund for infrastructure they announce. Leeway this gives them in the short term yes. But interest costs in the medium term loom large. A mirage it could be. Manage the debt they must or drown in it they will.

Feasible Is This 5%?

Short term easy they say. Long term reform needed they concede. EU resistance unlikely they believe. Adapt they must to survive or crumble they will. "Always two there are no more no less. A master and an apprentice," but in this case spending and debt it is.

Time They Need. Hmmm.

Not easy this will be. Not in a short amount of time no. Even 3.5% unlikely for next year. Historically high this spending is. Reachable with time yes. But easy? "Difficult to see; always in motion is the future," so be prepared they must for challenges and change. Much will depend on what the 1.5% covers new costs they must consider. May The Force (and good budgeting) be with them.