Germany's outgoing parliament may approve defense fund as new parliament delays borrowing reform

Germany's outgoing parliament may approve a new fund to increase defense spending, but changes to borrowing limits will wait for the new parliament. This follows the election of Friedrich Merz, who faces challenges from far-right and far-left parties. Merz's victory on Sunday comes as Germany seeks to enhance its military capabilities amid tensions with the U.S., Russia, and China. A senior ally emphasized the need for quick decisions on security and foreign policy. Reforms to the "debt brake," which limits state borrowing, will not be expedited. Merz has called for European nations to strengthen their defense efforts.