German lawmakers have reached an agreement to exempt some defense spending from the nation’s tight rules on running up debt.

The agreement between centrist parties, led by the likely next chancellor, Friedrich Merz, was billed as a response to America’s shrinking security guarantees.

Germany's government-in-waiting unveiled a plan to boost defense spending by hundreds of billions of dollars by the end of the decade by relaxing strict so-called "debt brake" rules enshrined in its constitution.