German Conservative leader Friedrich Merz was elected Chancellor on Tuesday after the unprecedented second round of parliamentary voting, after his coalition in the left -east -colaried Social Democrat received an unexpected defeat in the initial vote.
The Merzi CDU/CSU Union won the February Federal Elections and signed a coalition transaction with the Social Democrats. The Agreement describes measures aimed at reviving growth, including companies' tax cuts and lower energy prices, in addition to certain liabilities to support Ukraine and increase defense spending.
German economy
The German economy affects the euro significant impact on the largest economic status of the eurozone. German financial results, GDP, employment and inflation can significantly affect the overall stability and confidence of the euro. As the German economy is strengthening, it can promote the value of the euro while it weakens while it is true. In general, the German economy plays a crucial role in shaping the strength and perception of the euro in global markets.
Germany is the largest eurozone economy and therefore an influential actor in the region. During the eurozone's sovereign debt crisis in 2009-12, Germany was central to the creation of various stability funds to save debtors. In the implementation of post -crisis fiscal compact, it took a leadership role – a set of stricter rules to manage Member States' finances and punish “debts”. Germany led the “financial stability” culture and the German economic model has been widely used by members of the eurozone as an economic growth design.
Bunds are bonds issued by the German government. Like all bonds, they pay the owners a regular interest or coupon followed by the full value of the loan or the basic principle. As Germany is the largest economy in the eurozone, Bunds is used as a comparative basis for other European government bonds. The long -term Bund is considered to be a risk -free investment because they are supported by the full faith and credit of the German people. For this reason, investors deal with them safe-this is a value during the crisis while falling during the flowering periods.
The yield of the German Bund measures every year of return, which the investor can expect to keep the German government bonds or Bunds. Like other bonds, Bunds owners pay the interest on regularly, called the coupon, followed by the full value of the bond with a deadline. The coupon is fixed, the yield varies as it takes into account the changes in the price of the bond, and therefore is considered to be a more accurate reflection of the return. The decline in Bund's price increases the coupon as a percentage of the loan, resulting in higher returns and vice versa. This explains why the Bund gives the opposite of prices.
The Bundesbank is the Central Bank of Germany. It plays a key role in the implementation of monetary policy in Germany and the central banks of the region more broadly. Its purpose is to keep the price stability or to maintain low and predictable inflation. It is responsible for the smooth operation of the payment systems in Germany and is under the supervision of financial institutions. The Bundesbank has a reputation that he is conservative, prioritizing fighting over economic growth. It has been an influential setup and policy of setting up the European Central Bank (ECB).
