Monthly Outlook: The start of the beginning

NATO ‘Allies’ agreed to increase core defence expenditures to 3.5% of GDP and to spend at least another 1.5% on defence-related investments. Of course the fiscal impulse will be phased-in and, as such, 2025 is only the start of the beginning – to paraphrase Winston Churchill. Regardless, such a massive increase in government expenditures may require a lot of budgetary acrobatics to make it work financially.