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European Central Bank President Christine Lagarde said on Saturday that Germany has finally decided to spend big after years of restraint, calling it a turning point for Europe’s largest economy. Speaking in Washington during the IMF’s annual meetings, Lagarde said fiscal policy “will play a more supportive role in the years ahead,” especially for countries increasing defense investments, pointing out that “this is certainly the case (in a big way) by Germany, where major military and infrastructure investments are underway.” Lagarde added that those projects “are just beginning to have an impact but will be rolled out over the next three years in a very significant way,” according to Bloomberg. Lagarde said Germany is finally “using its balance sheet and its capacity to borrow,” signaling the end of its long-standing reluctance to spend. Much of that change comes from Friedrich Merz, the new German chancellor, who pushed through a landmark spending bill before even taking office. The plan unlocks federal borrowing to rebuild Germany’s infrastructure and overhaul its military. Lagarde described it bluntly: “Agent of change Germany — who would have thought?” Germany boosts growth plans with €400 billion investment drive Sharing the stage with Lagarde, International Monetary Fund Managing Director Kristalina Georgieva praised the decision.“My message is: bravo, bravo, bravo,” she said.“Because what Germany is demonstrating is that imbalances can be addressed, it is a matter of will, and mostly political will.” Georgieva’s remarks came as optimism builds across Europe that Germany’s fiscal push could lift growth in the region, which has long relied on the country’s cautious approach to spending. Earlier this week, Merz proposed creating a pan-European stock exchange to strengthen competitiveness against the United States and Asia. Lagarde reacted to the plan, saying, “When I hear the German chancellor say we need in Europe one single…

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Filed under: News - @ October 19, 2025 2:13 am