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.

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.

German lawmakers passed a landmark spending package, taking a major step toward unlocking hundreds of billions of euros in debt financing for defense and infrastructure and heralding the end of decades of budget austerity.