German election results challenge future fiscal policy and debt reform

Germany's recent parliamentary election has made it harder for the next government to pursue more flexible fiscal policies. Mainstream parties, including the CDU/CSU, won less than two-thirds of the seats, limiting their ability to change strict borrowing limits. The far-right AfD and the Left party gained significant seats, totaling 216 in the 630-member parliament. This shift complicates plans for infrastructure investment and defense spending, as the new government may struggle to find alternative funding sources. Without a constitutional majority, the next administration may need to consider temporary suspensions of borrowing limits. However, this could face legal challenges, and experts warn that maintaining current defense spending levels will be difficult without reform.