Germany's potential fiscal policy changes, which include increased defense spending and a significant infrastructure fund, are seen as a pivotal shift for the country's sluggish economy, according to analysts. Coalition negotiations are underway, and timely implementation of these reforms is critical for success.

Germany's central bank reports an annual loss, signaling potential economic stagnation ahead. President Joachim Nagel warns of ongoing challenges as the new government led by Friedrich Merz prepares to address a budget deficit and structural economic issues.