Merkel’s conservatives make big concessions to SPD in coalition deal

Berlin (Reuters): German Chancellor Angela Merkel’s conservatives and the Social Democrats (SPD) agreed to a coalition deal yesterday, taking Europe’s economic powerhouse closer to a new government after months of uncertainty that unnerved partner countries and investors.

In a move likely to mean a shift in Germany’s euro zone policy, media reported the SPD would take the finance ministry that was until recently presided over by conservative Wolfgang Schaeuble, widely despised in struggling euro zone states during his eight-year tenure for his focus on austerity.

SPD leader Martin Schulz said earlier this week that his party had ensured that an agreement with the conservatives would put an end to “forced austerity” and set up an investment budget for the euro zone.

Handing over the crucial finance ministry suggests the conservatives had to make big concessions to get the SPD to agree to renew the ‘grand coalition’ that has governed Germany since 2013.