The parties hoping to form Germany’s next government have agreed to create a 500 billion euro infrastructure fund and overhaul borrowing rules, a tectonic spending shift that jolted markets on Wednesday on hopes of reviving Europe’s largest economy. After three years of attacking what he called the outgoing government’s profligacy from opposition, Germany’s likely next leader Friedrich Merz is now trying to use the narrow window before new legislators officially take up their seats to pass the massive borrowing package.
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