Friedrich Merz, Germany’s chancellor-in-waiting, has agreed a deal with his likely coalition partner to inject hundreds of billions in extra funding into the country’s military and infrastructure, marking a “sea-change” in the nation’s conservative approach to borrowing.

Germany's political parties hoping to form the next government have agreed to loosen the country's strict "debt brake" system which constitutionally limits new government borrowing to 0.35% of GDP. Conservative leader Friedrich Merz says extraordinary efforts are needed to boost the country's defence capabilities given the current security uncertainty.