By Germany’s federal election has resulted in a victory for the CDU/CSU alliance, led by Friedrich Merz, securing 28.5% of the vote. This outcome has reassured investors, with Germany’s stock market responding positively. However, the country still faces significant economic challenges, including high energy prices, weak demand, and fiscal constraints.
Despite market optimism, business leaders urge the new government to act swiftly. CEOs from major corporations stress the need for regulatory reforms and infrastructure investment. Meanwhile, the defense industry sees a boom, anticipating increased military spending under the CDU/CSU leadership.
However, Germany’s economic downturn over the past two years poses difficulties. Debate over the “debt brake” fiscal rule remains a critical issue, with pressure mounting on the government to relax restrictions and allow for greater public investment.
Investors remain hopeful that a stable coalition government will implement necessary economic reforms, but the road ahead remains uncertain.