Germany will set up €500 billion special defense fund | Forexlive

German defense stocks have been some of the best-performing stocks in the world this year and we found out why today as German chancellor in waiting Friedrich Merz announced a €500 billion special defense fund.

He also said that the debt brake will be reformed for defense with spending above 1% exempted.

Bund yields are up 2.7 bps to 2.50% from a low today of 2.43%.

€500 billion is no small number, it’s 12% of German GDP.

Update: A separate report said this fund is also for infrastructure, which makes sense as that would be a gigantic jump in military spending.