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How Eurozone Fiscal Rules Are Colliding with Defense Spending
Episode 78 of The European Economy Podcast examines the growing tension between the EU's strict fiscal rules and the urgent need for higher defense spending across the bloc. Lucas and Luna break down the numbers: with the trade-weighted dollar at 120.4 and the euro slipping to $1.15, German exporters are already squeezed, while countries like Italy and Spain face tough choices between deficit limits and military investment. They discuss why the European Commission's proposed escape clause for defense spending may not be enough, and how the divergence in fiscal space between core and…
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