Merz bets on investment fund to shore up economy

BERLIN — Germany's likely next government under conservative leader Friedrich Merz has said it plans a shot in the arm for the flagging economy with a huge program of investment in defense and infrastructure.

But economists warn that Europe's largest economy will also need structural reforms for a sustainable recovery after two straight years of recession.

Both Merz's center-right CDU/CSU and the center-left SPD, who are in talks on forming a coalition, say they want to restore industrial competitiveness.