Merz Secures Eurozone Boost with Greens' Borrowing Compromise

Friedrich Merz, Germany’s incoming Chancellor, reached a significant financial accord with the Greens, igniting eurozone optimism. This agreement, involving a 500 billion euro fund, aims to revive growth and bolster defense amid changing global politics. It represents a shift from fiscal conservatism, favoring economic transformation and infrastructure.

German Chancellor-in-waiting Friedrich Merz has clinched a pivotal agreement with the Greens, signaling a dramatic shift in financial policy within Europe's largest economy. The accord, finalized on Friday, advocates for substantial state borrowing to stimulate growth, boosting investor confidence and sending the euro soaring.

Following recent elections, Merz's conservative faction, aligned with the Social Democrats, proposed a substantial 500 billion euro fund targeting infrastructure and military enhancements. This approach departs from Germany's historically conservative fiscal policies, a response to global political uncertainties highlighted by U.S. President Donald Trump's unpredictable shifts.

A consensual deal with the Greens, pivotal for achieving a constitutional majority, reassures the party that funds will prioritize climate and economic transformation, with a designated 100 billion euros allocated accordingly. With examination by finance ministry officials underway, parliamentary discussions are hurriedly progressing to finalize the details before the new government session on March 25.

(With inputs from agencies.)