Business
Germany Set to Approve Major Spending Bill on Defence and Infrastructure
Germany is poised to pass a significant spending bill that will unlock hundreds of billions of euros for defence and infrastructure projects, potentially boosting both the euro and the German stock market. Investors remain optimistic about the fiscal reform, which could support continued market uptrends.
German Markets Surge Ahead of Parliamentary Vote
The German stock market and the euro continued their upward momentum ahead of Tuesday’s parliamentary vote on the spending bill. The proposal, introduced by Chancellor-in-waiting Friedrich Merz, aims to exceed the traditional 1% GDP limit on defence spending, allowing the government to allocate approximately €45 billion for military expenditures. Additionally, the bill will establish a €500 billion special fund dedicated to infrastructure development.
Last Friday, Merz secured a crucial agreement with the Green Party on the debt-financed spending package, clearing a major hurdle in the legislative process. With the CDU/CSU, SPD, and Greens controlling 520 seats in the Bundestag, the coalition comfortably surpasses the two-thirds majority required to amend constitutional laws.
The DAX index rose 0.73% on Monday to 23,154.57, just 1% below its all-time high of 23,419.48 recorded on March 6. Meanwhile, the euro strengthened by 0.43% against the US dollar to 1.0922, holding near a four-month high, despite minor fluctuations during Tuesday’s Asian trading session.
European Defence Stocks See Massive Gains
Defence stocks have surged since mid-February following US President Donald Trump’s decision to initiate peace talks with Russian President Vladimir Putin while initially excluding the European Union and Ukraine. His move to halt all military aid to Ukraine has prompted the EU to accelerate defence spending.
In early March, European Commission President Ursula von der Leyen proposed an €800 billion defence budget for the bloc, urging member states to raise military spending by an average of 1.5% of GDP. In response, Merz announced plans to exempt defence spending from Germany’s constitutional debt brake. His proposal received backing from all 27 EU member states at a summit in Brussels on March 6.
The increased focus on defence has propelled major European arms and aerospace stocks to new highs. Shares in German weapons manufacturer Rheinmetall have soared 52% month-over-month and 123% year-to-date, repeatedly breaking records. Similarly, BAE Systems and Rolls-Royce Holdings have climbed 42% and 36%, respectively, in 2025.
The Euro Stoxx Aerospace & Defence Index has jumped 33% year-to-date, significantly outperforming the pan-European Stoxx 600’s 8% gain. Meanwhile, Germany’s benchmark DAX has risen 16% this year, making it one of the best-performing global indices.
Euro Poised for Further Gains Amid Fiscal Reform
The euro has appreciated by 7% against the US dollar since its January low, driven by optimism over increased European defence spending. The massive fiscal injection into defence and infrastructure is expected to revitalize Germany’s economy and support the euro’s strength.
Conversely, the US dollar has weakened against major G10 currencies amid escalating global trade tensions. Analysts predict further declines due to rising economic uncertainty in the United States. “I still view any USD rallies as selling opportunities and would be fading any USD upside across the G10 board,” wrote Michael Brown, a senior research strategist at Pepperstone London.
The upcoming Federal Reserve rate decision on Wednesday will be a key moment for currency markets. Any dovish signals from the central bank could exert additional pressure on the dollar, potentially driving the euro even higher.
Business
Kennedy Center to Close for Repairs After Judge Blocks Trump Naming Plan
Most of Washington’s Kennedy Center will close for renovations after its board voted Tuesday to shut the landmark performing arts venue, hours after a federal judge blocked another attempt to add President Donald Trump’s name to the building.
The decision followed a ruling by US District Judge Christopher Cooper, who said the Kennedy Center board could not install a memorial to Trump or change the institution’s name without approval from Congress. The judge had previously ordered Trump’s name removed after it was added to the building’s facade.
“Simply put, Defendants cannot install memorials for President Trump or anyone or anything else at the Kennedy Center without Congress’s blessing,” Cooper wrote in his latest ruling.
Trump has said the renovation work, for which Congress has allocated $257 million, will not proceed unless the courts allow the board to move forward with plans to recognize him on the building. He said the Justice Department would appeal Cooper’s decision.
The board, which Trump chairs after replacing members with his appointees, voted to close the venue as it faces extensive repair needs and financial difficulties. Trump participated in the board’s virtual meeting, where the dispute over the institution’s future produced tense exchanges with Rep. Joyce Beatty, an Ohio Democrat and ex-officio board member who has opposed efforts to add Trump’s name.
The Kennedy Center has argued that the building requires major work. A partial ceiling collapse in a main hallway earlier this month added to concerns about the condition of the facility. Reuters reported that the closure could last as long as two years.
The dispute over the building’s name began after Trump’s return to the White House. The board first added his name to the facade, but Cooper ruled in May that the change was unlawful because Congress had established the Kennedy Center as a memorial to President John F. Kennedy. Workers removed Trump’s name in June, leaving scaffolding and a tarp covering part of the facade.
In August, the board voted to add an inscription describing the center as restored and renovated by Trump and proposed renaming the plaza outside the venue. It also considered another inscription if the Trump Kennedy Center Fund raised $100 million. Cooper’s latest ruling blocked those plans.
The court dispute has coincided with financial problems at the institution. Court filings have described declining ticket sales and contributions, while several artists and organisations have canceled performances or moved activities elsewhere. The board has argued that Trump’s involvement and fundraising are important to the center’s financial future.
The Kennedy Center, which opened in 1971, hosts major performing arts organisations and events including the annual Kennedy Center Honors. Its future now depends on the renovation process, the court appeal and decisions over how the institution will be financed and managed.
Business
Brent Crude Climbs Above $108 as Hormuz Strike and Saudi Pipeline Shutdown Raise Supply Fears
Brent crude prices climbed above $108 a barrel on Monday as growing disruption around the Strait of Hormuz raised fresh concerns about global oil supplies.
Brent crude for October and November deliveries rose by more than 3% during morning trading, extending gains from the previous week when prices moved back above the $100 mark. US West Texas Intermediate crude for October delivery also advanced, rising about 2.3% to around $102 a barrel.
The latest increase followed Saudi Arabia’s announcement that its East-West oil pipeline had been temporarily shut after drone attacks. The pipeline transports crude across Saudi Arabia to ports on the Red Sea, providing an alternative route that allows exports to bypass the Strait of Hormuz.
The closure comes as shipping through the strategic waterway faces growing risks. An unnamed merchant vessel was struck in the strait on Sunday, killing one crew member and injuring three others, according to Iranian authorities.
Shipping conditions have changed significantly since the conflict began. Vessels are required to obtain permission from Iran to pass through the waterway, while Tehran is also considering a system for charging transit service fees. Ships that do not comply have faced attacks, while US forces have carried out periodic strikes along Iran’s coastline.
Diplomatic efforts to address the situation have also suffered a setback. Oman postponed planned talks between Iran and Gulf states concerning the future of the waterway, which is one of the world’s most important routes for seaborne oil shipments.
The disruption is already affecting fuel markets beyond the Gulf. In the United States, the national average price of diesel surpassed $6 a gallon on Friday for the first time, rising from about $5.85 a week earlier and roughly 60% above the $3.71 recorded a year ago.
US petrol prices have also reached record levels, averaging about $4.22 a gallon after rising over the Labor Day weekend.
President Donald Trump has blamed Ukraine for part of the diesel supply pressure, saying Ukrainian President Volodymyr Zelenskyy should stop targeting Russian diesel infrastructure. Ukraine has attacked more than 20 Russian refinery targets this summer, while Russia responded by banning diesel exports.
According to Lipow Oil Associates, Russia’s export restrictions have removed about 800,000 barrels per day of diesel supply, while disruptions linked to the Strait of Hormuz have affected around 1.2 million barrels per day.
The broader impact on crude supplies is even greater. Oil flows through the Strait of Hormuz have fallen from about 20 million barrels per day before the war to roughly 7 million. The conflicts have also disrupted refineries representing about 5 million barrels per day of capacity, adding to pressure on global fuel markets.
Business
Google Plans €13 Billion Investment in Finland Data Centres
Google is set to invest at least €13 billion in data centres and digital infrastructure in Finland over the next two years, marking the company’s largest single investment in Europe as it expands its capacity for artificial intelligence and other digital services.
The investment will support data centres and related infrastructure in the Finnish municipalities of Hamina, Kajaani, Muhos and Vaala. Google also plans to fund clean energy projects as well as initiatives focused on biodiversity, education, research and workforce development.
The company said the decision reflects Finland’s strong position in developing energy-efficient infrastructure for artificial intelligence. The new facilities will support a range of Google services, including its Gemini chatbot.
Construction is expected to take place during 2027 and 2028. Google estimates the investment could contribute around €3.6 billion annually to Finland’s gross domestic product and support more than 37,000 jobs. About 16,000 of those positions are expected to be linked directly to construction work.
Once construction is completed, Google expects its facilities and related economic activity to support around 7,000 jobs each year. These positions are expected to include technical and facility roles, equipment suppliers and workers in nearby shops, restaurants and other services.
Finnish Prime Minister Petteri Orpo welcomed the announcement, saying the investment demonstrated the country’s strengths and could generate benefits beyond the immediate spending.
“The value of the data economy extends far beyond direct investment into spurring innovation, research and development,” Orpo said. He added that closer cooperation with Google could produce long-term benefits for both sides.
Why Finland is attracting data centres
Finland’s climate and energy supply are major factors behind its appeal to technology companies. Data centres consume large amounts of electricity and produce substantial heat, making cooling a major operational cost.
The country’s cold climate can help reduce cooling requirements, while its energy system includes nuclear power, wind and hydropower. The combination of relatively stable electricity supplies and favourable conditions for cooling has encouraged a growing number of data centre projects across Finland.
Google has maintained a presence in the country since 2009, when it acquired a former paper mill in the coastal city of Hamina and converted the site into a data centre. The company has expanded the facility over the years.
The latest investment comes as Finland faces weak economic growth and record unemployment. For Orpo’s government, attracting major technology investments has become an important economic priority.
With the country’s data economy offering prospects for investment, employment and research, Google’s announcement is expected to strengthen Finland’s position as a major European hub for digital infrastructure and artificial intelligence.
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