German equities recovered some ground early on Monday as the government coalition between Angela Merkel’s Christian Democratic Union (CDU) and Germany’s Social Democratic (SPD) party was approved by SPD members over the weekend.

Given how poorly the SPD has performed in recent polls, it would have been a high-risk strategy for SPD members to reject the proposed coalition and risk new elections. After five months of talks, Angela Merkel can now move ahead with her fourth term in power. This news should bring back some stability to Europe’s largest economy and should be positive for investor sentiment.


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