German chancellor-in-waiting Friedrich Merz reached an agreement with the Greens on Friday on a massive increase in state borrowing, just days before a parliamentary vote on the issue, a source close to the negotiations said.

Germany has officially introduced a significant infrastructure fund and exempted defense spending above 1% of GDP from debt limits. The measures are intended to mitigate economic stagnation and geopolitical challenges,

Germany's likely next chancellor, Friedrich Merz, on Friday hailed a cross-party agreement on a landmark infrastructure and defence package amounting to €500 billion ($545 billion). The agreement between his conservative bloc,