Germany's would-be next chancellor, Friedrich Merz, won lawmakers' approval to loosen strict debt rules for higher defense spending as doubts mount about the strength of the trans-Atlantic alliance.

Germany’s Bundestag, or Lower House of Parliament, passed a historic bill allowing it to sidestep its strict rules on debt to spend big on defence and infrastructure. Why is this move a big deal? And why does its timing matter?

Germany's parliament approved plans for a massive spending surge on Tuesday, throwing off decades of fiscal conservatism in hopes of reviving economic growth and scaling up military spending for a new era of European collective defence.

The multibillion-euro package loosens borrowing limits and allows new investments in defense, infrastructure and climate. The plan was backed by the conservative CDU/CSU alliance, center-left SPD and Greens.

Germany's parliament voted Tuesday in favor of incoming chancellor Friedrich Merz's massive debt reform, which will free up hundreds of billions of euros for Europe's defenses amid Russia's ongoing war in Ukraine.