Is Germany Without the Debt Brake on the Right Track?

The International Economy Magazine

June 2025

I was delighted to be asked to contribute to International Economy Magazine on the topic "Is Germany Without the Debt Brake on the Right Track?" You can read my contribution HERE, along with the excellent assessments of other economic luminaries far smarter than I am.

My sense is that, between Russia’s aggression against Ukraine and ominous threats against the rest of Eastern Europe and President Trump’s lukewarm (at best) commitment to the defense of Europe, we are beginning to see a significant economic and military shift in Europe. In essence, Trump will - perhaps unintentionally, perhaps intentionally — “Make Europe Great Again” as a global economic bloc while building up its military to world-class standards.

And it will be Germany leading the way. Berlin made its intentions perfectly clear earlier this year when it lifted its sacrosanct Debt Brake, while putting down an initial down payment of €100 billion for defense and infrastructure modernization, most of which will be tech-based, resulting in enormous, long -term commercial spin-off benefits (much like we have witnessed in the U.S.). Germany says it will take them 10 years to build up their military - I am betting it will be closer to five years. With it will come the birth of German tech giants that will increasingly compete with US tech giants. Only time will tell, but one thing is certain: The economic and political status quo is over, and a new dawn is breaking over Europe that will likely be quite positive for investors and for democracy overall.

I hope you find this of interest, along with the other excellent essays offered on this historic topic.