Signs of spending by German government lift shares in Europe

19th August 2019

Comments made by Finance Minister Olaf Scholz suggesting Germany could boost spending has alleviated fears and boosted European shares.

Amid fears of global market instability Europe started the week with it’s leading stock markets rising.

Investors have thus appeared to somewhat relax their fears of a looming recession. German markets, which have been shrinking, registered the largest gain at 1.1%, while Britain’s FTSE 100 is now 0.9% higher.

The German business community was hopefully after Finance Minister Olaf Scholz passed comments suggesting that a fiscal stimulus package to boost growth could be on the cards. Germany’s economy shrank by 0.1% between April and June.

The Guardian reports Minister Scholz as having said “The last crisis cost us €50 billion, according to my estimates….We have to be able to muster that and we can muster that…The biggest problem is uncertainty, including that caused by the Chinese-US trade war”.

Reports have emerged that the slowdown of Germany’s economy has placed pressure on outgoing chancellor Angela Merkel to break the self-imposed German ‘balanced-budget rule,’ preventing the country from running a budget deficit.

In addition to the somewhat-bleak outlook of European markets, US President Donald Trump has given comments to various sections of the press saying that he does not believe the country is headed towards a recession.

While unemployment is at an all-time low in America, the President’s controversial relationship with China has led to the introduction of tariffs between the two nations, having a negative impact for both countries.

President Trump once again made headlines on Monday morning by claiming that America is considering purchasing the island of Greenland, a semi-autonomous Danish region. Mr Trump claimed this was being considered due to strategic regions, however both Greenland and Denmark have categorically stated that the former is not up for sale.

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