The political instability in Germany came to an end with German Chancellor Angela Merkel’s conservatives and the Social Democrats (SPD) agreeing to a coalition deal. Europe’s economic powerhouse has got closer to the formation of a new government after four months of uncertainty which put partner countries in the European Union and investors in a tizzy. The move may mean a shift in Germany’s Euro Zone policy . The SPD would insist on being given the finance and labour ministries which were so far held by the conservatives. SPD leader Martin Schulz had said earlier that his party would ensure that an agreement with the conservatives would put an end to forced austerity and go all out to set up an investment budget for Euro zone. It is obvious that the conservatives led by Angela Merkel have had to make major concessions to bring SPD in line. The SPD have planned to revamp itself as the main opposition party and agreed to coalition talks with reluctance.
However, the agreement will end the prolonged uncertainty weakening German’s role in international affairs. Merkel’s continuance as Chancellor is in doubt. She had succeeded in cobbling together a government only after a void of four months. This was at a time when Europe faced major challenges. There is need for reform in the Euro zone and negotiations have to be completed for Brexit. Merkel had tried to form a government with two smaller parties earlier but failed. The renewal of the alliance with the SPD was a last ditch move.