The Social Democratic Party's Lars Klingbeil has been tapped to become Germany's next finance minister in the incoming centrist coalition government.

Lars Klingbeil looks on during a press conference with Germany's chancellor-in-waiting and leader of the Christian Democratic Union party (CDU) Friedrich Merz, Christian Social Union (CSU) leader and Bavarian Premier Markus Soeder,

Social Democrat co-leader Lars Klingbeil will become Germany’s next finance minister, putting him in charge of the purse strings of Europe’s largest nation as it prepares to unleash hundreds of billions of euros to overhaul its infrastructure and its armed forces.

The economy returned to expansion at the start of 2025, with previously hoped-for improvement likely dashed by tariff threats.

The German economy grew in the first quarter of the year thanks to consumption and investment, escaping a recession after contracting in the last quarter of last year, data showed on Wednesday. Gross domestic product rose in line with forecasts,

A Reuters poll had projected 0.2% growth from the previous quarter. Germany's economy, the largest in Europe, has long been sluggish, with its GDP flip-flopping between growth and contraction in each quarter throughout 2023 and 2024.