Mücahithan Avcıoğlu
14 March 2025•Update: 14 March 2025
ISTANBUL
European stock markets ended week up as German lawmakers have reportedly agreed on a boost in defense and infrastructure funding on Friday.
Germany's parliamentary leaders of the Christian Democratic Union and its Bavarian sister party the Christian Social Union (CSU), along with the Social Democrats (SPD) and the Greens, have reached an agreement on a multi-billion-euro defense and infrastructure package after lengthy talks.
The new agreement will exempt defense spending beyond 1% of GDP from Germany’s strict constitutional debt brake and create a €500 billion ($544 billion) fund for infrastructure investment.
The package also includes €100 billion earmarked for climate and economic transformation projects.
Responding to the fiscal agreement, Friedrich Merz, Germany’s chancellor-in-waiting, said: “This is a huge sum. We consulted and reached a good result that was acceptable to all parties involved.”
"We are capable of defense and now fully prepared to defend ourselves. There will be no shortage of financial resources to defend peace on our continent. Germany is back,” Merz said.
Following these, defense stocks surged as Rheinmetall soared 6.2%, Airbus 4.3% and BAE Systems 4.2%.
German automaker BMW closed down 0.7% after reporting a 37% decline in annual profit in 2024 in light of weakened demand from China.
The pan-European Stoxx 600 rose 1.15% or 6.16 points to 546.6.
Germany's DAX 40 index grew 1.86%, or 419.68 points, to 22,986.82, while Britain’s FTSE 100 gained 1.05% — 89.77 points — to 8,632.33.
France's CAC 40 also climbed 1.14%, or 90.07 points, to 8,028.28, and Italy's FTSE MIB 30 index soared 1.73% to 38,655.3 in a 655.58-point rise.
