Germany’s Crunch Election Grips Market Wanting Higher Spending
The outcome of Germany's highest-stakes election is paving the way for a pivot to increased spending, with markets predicting the end of an era for constrained fiscal policy. Friedrich Merz's conservative opposition leader comfortably won Sunday's federal election, in line with expectations, and is likely to form a new government as soon as possible. The nation will also "have somewhat better odds of avoiding a massive split with the Trump administration over trade, Russia, or China," according to analysts.
- A pro-business, pro-investment orientation under Merz could boost economic growth and investment in Germany, potentially leading to a more competitive European economy.
- How will the increased spending in Germany impact the global economy, particularly in relation to the US-led push for increased defense spending?