Barclays: The new German government may promote fiscal easing, and the stock market is expected to benefit from policy dividends.

Jinshi data, February 24th news, Barclays analysts pointed out in a report that the coalition government soon to be formed in Germany may support some fiscal easing policies, which will be welcomed by the Capital Market. Although the far-right Alternative for Germany (AfD) and the Left Party may form a minority alliance to obstruct constitutional amendments and reforms, the Left Party’s support for the reform of the ‘debt brake’ mechanism means that fiscal expansion policies are still feasible. If the conservative Christian Democratic Union (CDU) and the Social Democratic Party (SPD) form a two-party ruling coalition, the policy focus may be on tax cuts and defense spending. If a three-party coalition government including the Green Party is formed, it is expected to implement smaller-scale tax reduction measures, while cutting defense budgets at the cost of redirecting more fiscal resources to the green transformation sector.