The German government coalition ended stimulus discussionswithno deal, will continue tomorrow

Parties in German Chancellor Angela Merkel’s coalition wrestled on over final details of a huge stimulus package to aid recovery from the COVID-19 pandemic, including whether cash incentives to buy new cars should exclude combustion engines. However, the German government coalition ended stimulus on Tuesday without a deal being reached but will continue Wednesday 3 June.

The package is meant to help companies and employees rebound more quickly from a pandemic that is expected to plunge Europe’s largest economy into its deepest recession since World War Two. 

Economy Minister Peter Altmaier, of the CDU, said the package could encompass a one-off splurge of 5 billion euros for families with children. He also hoped the deal would include measures to foster more digitisation.

However, he added "we will take things step by step.” 

Market implications

Markets are unchanged on the news and await progress down the line.