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German Chancellor Angela Merkel's conservatives (CDU/CSU) and the centre-left Social Democrats (SPD) have reached an agreement om a coalition deal that takes Germany one step further into forming a new government

The deal which distributed ministries means, the SDP would take over the finance ministry headed by Wolfgang Schaeuble, a conservative. This move reflects remarks made earlier in the week by SDP leader Martin Schulz, who previously ruled out going back into government with Merkel's CDU and sister party, the CSU, that his party wants to ensure there's an end to forced austerity and set up an investment budget for the euro zone.

After months of uncertainty, hopes are renewed in Germany that a new government would be in place by Easter after the the conservatives made a huge compromise  to the SDP by handing over the finance ministry, to renew the grand coalition that has presided Germany since 2013.

Germany's role in international affairs will be handed a boost by this agreement and bring some relief to investors and partner countries, who had been concerned by the negotiation stalemate at a period when Europe is facing multiple challenges like Britain's impending exit from the EU and the need for euro zone reform.

In addition to the finance ministry, the SDP would also have the labour ministries while the Christian Democrats (CDU) gets the economy and defense ministries. The Christian Social Union will provide the interior minister. It is not yet clear which party gets the justice, family and environment ministries.