Europe's biggest economy is going to rewrite its debt rules to spend billions on defence.

Live from the UK, this is the Marketplace Morning Report from the BBC World Service.

I'm Sarah Rogers in Fuliana Burn. Good morning. First, over to Germany and plans for an

unprecedented multi-billion dollar defence fund with a further $530 billion for infrastructure spending.

In order to make that happen, the Chancellor to be Friedrich Merz and his coalition government will put forward plans to loosen the country's debt rules, as BBC's Graham Satchel reports.

Germany has had strict borrowing limits known as the debt break ever since the financial crash of 2008.

This proposal to overhaul borrowing rules and create a new infrastructure fund represents a significant change in German thinking.

More than most countries in Europe, Germany has relied on America for its security since the Second World War.

It says it's still counting on the US to stand by what it calls

mutual alliance obligations.

But if the new plans are approved, spending on Germany's own military would expand dramatically.

Speaking in a news conference last night, the Chancellor in waiting Friedrich Mertz said in view of the

current threats to freedom and peace in Europe, his country must now do whatever it takes to increase

its own defence. Some commentators like the chief economist at Deutsche Bank have described the

proposal as one of the biggest paradigm shifts in German post-war history.

The BBC's Graham Satchel. Now let's do the numbers.

So those plans to loosen the debt break meant a sell-off of Germany's government bonds

with 10-year yields at the euro area's benchmark, climbing 19 basis points to 2.67%.

The euro also rose 0.7% against the dollar, a four-month

high. A Hong Kong-based logistics company has announced plans to sell most of its stake in two

key ports on the Panama Canal to a group led by a US investment firm. The key shipping route is a stated

target of President Trump for US control.

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