Merz vows subsidy cuts, pension reform to protect Germany's AAA rating

German Chancellor Friedrich Merz pledges fiscal consolidation—subsidy cuts and pension reforms—to preserve Germany's AAA credit rating, citing an upgraded growth outlook of 1.3%. The commitment signals a policy shift toward austerity amid fiscal warnings, but implementation risks are high given coalition constraints. This matters as it could influence German fiscal stance and EU-level budget debates.

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