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.
On July 4, Azerbaijani President Ilham Aliyev met with Turkish President Recep Tayyip Erdoğan in Khankendi, reaffirming the deep-rooted alliance betw...
Ukrainian President Volodymyr Zelenskyy said he and U.S. President Donald Trump discussed strengthening Kyiv's air defences amid intensifying Russian ...
A strike by French air traffic controllers forced the cancellation of around 40% of flights at Paris airports on Friday, causing major disruption duri...
Indonesia’s police athletes won 22 gold, 9 silver, and 14 bronze medals at the 2025 World Police and Fire Games in Alabama, U.S....
India has notified the WTO of plans to impose retaliatory tariffs on U.S. goods in response to higher U.S. import duties on Indian automobile products...
Unexpected weakness in Germany's manufacturing orders in May signals ongoing uncertainty in industrial demand, despite a yearly rise and sector-specific gains.
A knife attack aboard a high-speed train travelling from Hamburg to Vienna left several passengers injured on Thursday.
German Chancellor Friedrich Merz called on the European Union to resolve its tariff dispute with the United States swiftly to safeguard critical industries such as cars, steel, and pharmaceuticals.
A severe heatwave pushing temperatures close to 40°C has sparked numerous forest fires across eastern Germany. In the Gohrischheide region of Saxony, a major blaze has spread across approximately 200 hectares, with flames advancing northwards despite overnight efforts to contain it.
The European Commission is set to propose allowing carbon credits from other countries to count towards the EU’s 2040 climate target, according to a leaked internal document.
The United States has rescinded licensing restrictions on ethane exports to China, allowing shipments to resume after a temporary halt and signalling progress in efforts to ease recent trade tensions.
A magnitude 5.5 earthquake struck off Japan’s Tokara Islands on Wednesday, with no tsunami warning issued but residents advised to remain vigilant.
Italy plans to grant approximately 500,000 work visas to non-EU nationals between 2026 and 2028, as announced in a cabinet statement. The initiative aims to address labor shortages by expanding legal immigration pathways
China has ramped up efforts to protect communities impacted by flood control measures, introducing stronger compensation policies and direct aid from the central government.
Greece is experiencing a deepening water crisis, with both surface and underground reserves dropping sharply due to overuse, outdated infrastructure, and prolonged drought, local media reported Friday.
On July 4, Azerbaijani President Ilham Aliyev met with Turkish President Recep Tayyip Erdoğan in Khankendi, reaffirming the deep-rooted alliance between the two nations.
Ukrainian President Volodymyr Zelenskyy said he and U.S. President Donald Trump discussed strengthening Kyiv's air defences amid intensifying Russian strikes.
A strike by French air traffic controllers forced the cancellation of around 40% of flights at Paris airports on Friday, causing major disruption during the peak of summer holiday travel.
Indonesia’s police athletes won 22 gold, 9 silver, and 14 bronze medals at the 2025 World Police and Fire Games in Alabama, U.S.
You can download the AnewZ application from Play Store and the App Store.
What is your opinion on this topic?
Leave the first comment