Bloomberg is reporting that the long-serving German finance minister Wolfgang Schäuble will step down as the country’s finance minister and will lead the German parliament, the Bundestag. The election resulted in a fractured parliament and Merkel would need a senior figure to lead the chamber.
Schäuble is a fiscal hawk that led Europe’s austerity policy. He was quite tough on Greece, the debt-stricken nation, and strived to throw the Hellenic Republic out of the euro-zone. The closing of Greek bank and the punishing “aGreekment†in July 2015 served as a deterrent for bigger countries such as Spain, Italy, and even France.
Together with a young and reformist French President, the new German government could take a different direction on spending. There is a savings glut in the old continent. Despite record low borrowing costs, investment is poor in Germany and across the 19-country currency bloc.
A release of spending could reinvigorate growth and eventually boost the euro.
More: The EU is treating the UK like Greece – 5 worrying similarities
