Germany considers U-turn on fiscal stance with new debt to fight climate change -report
Germany might spend after all
Reuters, citing a senior government source, says the goal of no new debt is no longer tenable in light of climate challenges.
Germany is under pressure to start spending because it can borrow money for free and has an enviable debt situation compared to its eurozone peers. By citing climate risks, it might be a way to climb down from the fiscal stance. The report says new debt will be linked 'strictly' to climate measures but that could still end of being stimulative.
This is euro-positive but the headlines hit just as the euro and pound were getting beaten up. It has halted the slide in EUR/USD at a session low of 1.1181 and the pair has bounced 10 pips.
Update: Here's the report.