Interesting to see how Europeans are now using the MMT theory. They are going to largely increase their deficit to finance their new defence spendings. Of course, the question is about the potential negative effects on inflation and the currency.
Regarding inflation, the risk is probably limited in the short term as there was no real tension before in Europe (cf for example the job market). The impact on the euro is even more surprising, as the euro has rebounded vs the USD and most of the other major currencies. The reason I found for that : in Germany, the deficit increase has led to a significant increase of long term interest rates.
