German economic advisors urge Merz to curb defence borrowing, cap debt at 98% GDP by 2040

Germany's Council of Economic Experts recommends that increased military spending be gradually absorbed into the regular federal budget rather than financed through additional debt, warning that current plans could push public debt to 98% of GDP by 2040. The advice challenges Chancellor Merz's proposed defence financing framework, creating fiscal-policy uncertainty ahead of budget negotiations. The recommendation signals a potential constraint on Germany's defence buildup, with implications for NATO burden-sharing and European security posture.

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