How The German Elections Could Determine Europe’s Destiny

A result being described one which could seal the continent’s fate in terms of ever closer political and economic union, Angela Merkel is likely to be re-elected as Germany’s chancellor for a fourth term in an election next Sunday.

With her conservative coalition ahead of the pack, pro-European Merkel’s victory is assured if voter polls are to be believed. Ahead of rival SPD party which was seen with 22 percent of the vote, Merkel’s conservative CDU-CSU coalition with 36 percent of the vote showed the latest voter poll published on Sunday by the Bild am Sonntag newspaper.

Jörg Ambrosius , the managing director of State Street Bank International, said on Monday that the election was “a very important election for the future of Europe.”

“My personal view is that there is now a time window opening when Germany and France could renew this French-German axis that drove the European agenda for quite some time in the past and I think now, with the economic recovery – and in the light of Brexit – there is a unique chance to bring the European Union, and financial union, to the next level.”

By either forming a new alliance with the smaller pro-business FDP party and Greens in a so-called “Jamaica coalition,” so named due to the colors of the political parties involved or repeating the same tried and tested “grand coalition” with the SPD, it’s anticipated that Merkel will have to form another coalition with another party.

But as long as the populist, anti-euro AfD Party is left out in the cold, Europe’s political establishment are likely to breathe a collective sigh of relief, irrespective of the make-up of an eventual coalition – following negotiations that could take months.

Especially given her support of French President Emmanuel Macron’s calls for reforms, a new era of ever closer political and economic integration in the region could be heralded by Merkel’s re-election for many pro-Europeans.

And not going down so well in all quarters is the idea of a pan euro zone finance minister and budget even though reforms are welcomed generally. Suggesting strongly about developing the existing European Stability Mechanism, the euro zone’s bailout fund, Macron’s ideas were described as “unrealistic” as they would require EU treaty changes, by Germany’s Finance Minister Wolfgang Schauble in May.

The leader of one of Merkel’s potential coalition partners, the FDP, said that the most important thing to recognize about the election was that there was “very limited risk” of a shock result, even while Ambrosius agreed that it was “a bit premature” to talk about a European finance minister.

“It’s important to state that what we can expect now is the fourth election where the pro-European parties will win and I think this would have been the largest risk that the election could’ve gone off track but I think there’s a very high chance that this will not be the case,” he said.

business partners he’s spoken to just hope for reforms, said Bernhard Mattes, president of the American Chamber of Commerce in Germany.

“All other business partners I’m talking to don’t see a risk in the elections, they rather see a hope that reforms that are still necessary for the future will take place, that we will have the investments in infrastructure, not only in streets and rivers etc but in the digital infrastructure for the future, they have a strong hope in tax reforms for the future to make the economy stronger here and to make Germany more attractive (to investors).”

(Adapted from CNBC)

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Categories: Economy & Finance, Geopolitics, Strategy, Sustainability, Uncategorized

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