Chancellor-in-waiting Friedrich Merz has secured a breakthrough deal with the Greens, paving the way for a massive state borrowing boost. The agreement, crucial for economic growth and defense spending, sent the euro surging as markets reacted to the historic shift in Germany’s fiscal policy.
German Chancellor-in-waiting Friedrich Merz reached an agreement with the Greens on Friday on a massive increase in state borrowing in Europe's largest economy, sources close to the negotiations said, in news that sent the euro soaring.
Merz's conservatives and the Social Democrats, who are in negotiations to form a government after an election last month, had proposed a 500 billion euro fund for infrastructure and sweeping changes to borrowing rules to revive growth and ramp up military spending.
Decades of German fiscal conservatism have been upended by U.S. President Donald Trump's policy shifts, with Merz warning that Russia and U.S. could leave the Europe exposed.
To reach the two thirds majority required for the necessary constitutional changes, though, they need the support of the Greens who had hitherto rejected their plans, worried the new funds might be used simply to finance policies such as tax cuts.
The three parties, however, reached a deal on Friday, two sources close to the talks said, The news sent euro zone government bond yields, shares and the euro currency jumping on expectation the plan would boost the wider European economy.
"There is a deal," the source said after German newspaper network RND had previously reported a compromise. A Greens source said they were happy with the deal.
One source familiar with the talks said the compromise includes the allocation of 100 billion euros for the climate and economic transformation fund.
The revised debt deal is being examined by finance ministry officials, two parliamentary sources said. Another source said some details were still being hammered out.
The parliamentary groups of all three parties were hastily convened to meet at 12:00 GMT to discuss the deal.
Russia warned that German-supplied Taurus missiles targeting its infrastructure would amount to direct German involvement in the Ukraine conflict.
Oman, the Netherlands, and Germany have signed an agreement to establish the world’s first liquid green hydrogen import corridor, linking Oman’s Duqm port with Amsterdam and Duisburg. The project aims to supply Europe with renewable hydrogen, supporting clean energy goals.
Germany has unveiled a new military aid package for Ukraine, reinforcing its support in the war against Russia.
German conservative leader Friedrich Merz has secured a coalition deal with the centre-left SPD, just as U.S. tariffs under President Trump increase the risk of a global recession.
Germany has suspended admissions of refugees via a UN resettlement programme, the interior ministry said on Tuesday, as a new coalition government that is expected to tighten immigration rules prepares to take office.
A mob attack on an Ahmadi place of worship in Karachi has left one man dead, highlighting ongoing persecution of the minority group.
A Russian court has sentenced 19-year-old Darya Kozyreva to nearly three years in prison for protesting the war in Ukraine using poetry and graffiti.
The new U.S. ambassador to Japan has called for closer military coordination with Tokyo, framing the alliance as crucial amid rising regional tensions and ongoing trade disputes.
Students in Serbia have rallied outside a police station as Belgrade University’s rector is questioned over support for anti-government protests.
OpenAI has unveiled a new option called Flex processing, an API service designed to provide more affordable AI model usage in exchange for slower response times and occasional resource unavailability.
The Russian ruble has emerged as the top-performing currency globally in 2025, registering an impressive 38% appreciation against the US dollar since the beginning of the year, according to a report by Bloomberg.
A small plane crashed near Kopake, New York, on April 13, killing at 6 people. The Mitsubishi MU-2B aircraft, carrying six people, went down under unclear circumstances. This marks the second aviation accident in New York in a week, raising safety concerns.
Several regions in Ukraine faced heightened alert on Palm Sunday, as reports of explosions and missile threats drew public attention and official responses.
Severe rainfall on April 17 led to flooding and landslides in the Piedmont region, prompting a large-scale emergency response from over 400 firefighters.
Start your day informed with AnewZ Morning Brief: here are the top news stories for April 16th, covering the latest developments you need to know.
A mob attack on an Ahmadi place of worship in Karachi has left one man dead, highlighting ongoing persecution of the minority group.
A Russian court has sentenced 19-year-old Darya Kozyreva to nearly three years in prison for protesting the war in Ukraine using poetry and graffiti.
The new U.S. ambassador to Japan has called for closer military coordination with Tokyo, framing the alliance as crucial amid rising regional tensions and ongoing trade disputes.
Students in Serbia have rallied outside a police station as Belgrade University’s rector is questioned over support for anti-government protests.
Russian Foreign Minister Sergey Lavrov extended Moscow’s support for the ongoing indirect nuclear talks between the United States and Iran, offering to mediate or assist in any way that would be beneficial to Tehran and acceptable to Washington.
A mob attack on an Ahmadi place of worship in Karachi has left one man dead, highlighting ongoing persecution of the minority group.
A Russian court has sentenced 19-year-old Darya Kozyreva to nearly three years in prison for protesting the war in Ukraine using poetry and graffiti.
The new U.S. ambassador to Japan has called for closer military coordination with Tokyo, framing the alliance as crucial amid rising regional tensions and ongoing trade disputes.
Students in Serbia have rallied outside a police station as Belgrade University’s rector is questioned over support for anti-government protests.
OpenAI has unveiled a new option called Flex processing, an API service designed to provide more affordable AI model usage in exchange for slower response times and occasional resource unavailability.
You can download the AnewZ application from Play Store and the App Store.
What is your opinion on this topic?
Leave the first comment