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Headlines

Germany's defence spending boom 'positive' for triple-A rating, S&P Global says

Published by Global Banking and Finance Review

Posted on March 5, 2025

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By Marc Jones

LONDON (Reuters) -Germany's plan for a massive ramp-up in defence and infrastructure spending will be a "positive" for its prized triple-A sovereign credit rating, S&P Global said on Wednesday.

The parties hoping to form Germany's next government have just agreed a tectonic spending shift with a plan to create a 500 billion euro infrastructure fund and to overhaul the country's long-standing 'debt brake' that caps borrowing.

"Our biggest concern with Germany's creditworthiness is the stagnating economy, so anything to boost the domestic economy is a credit positive," top S&P analyst Frank Gill said during a webinar.

He added that Germany's low debt levels meant it had "significant" room for additional spending, saying: "We think the triple-A rating is safe."

Gill's colleague Roberto Sifon-Arevalo also said Canada's fiscal space was "quite ample" to sustain its triple-A rating despite its current dispute over tariffs with the United States.

(Reporting by Marc JonesEditing by Amanda Cooper and Gareth Jones)