Berlin’s decision to lift all caps on military spending and binge on infrastructure marks a U-turn for the fiscally conservative country.

Germany is in for a massive ramp-up in spending under an agreement by the parties hoping to form its next government, with a 500 billion euro special fund sought for infrastructure and plans to unshackle defence investment from its debt rules.

Germany’s plan to create a €500 billion ($534 billion) infrastructure fund puts energy grids on track for a massive spending boost after years of underinvestment, part of a broader effort to revolutionize the country’s public finances and jumpstart the economy.

They also said they will seek to set up a €500 billion ($533 billion) fund to finance spending on Germany's often-creaking infrastructure over the next 10 years to restore the e