Goldman Explains What Today's German Election Means

Angela MerkelREUTERS/Odd Andersen/PoolGerman Chancellor Angela Merkel conducts a lecture, after writing her name on a board, at a classroom in Heinrich Schliemann Gymnasium, a secondary school in Berlin, August 13, 2013. Merkel delivered a lecture to a 12th grade class on the building of the Berlin Wall in August 1961.

The big news out of Germany is that Angela Merkel’s party won big, and she might not even need a coalition partner to form a government.

What does it mean?

Goldman’s Dirk Schumacher explains. Basically, not much change from the current path:

As we have argued in the past, we do not expect any significant change in the German government’s approach towards Europe after the elections. Several aspects of today’s election reinforce this belief. For one, the strong result of Chancellor Merkel can be interpreted as a general support for this approach; in particular if one takes into account that the SPD and Greens voted along with the government in the Bundestag on the various financial support measures. The FDP, at the same time, which probably had the biggest internal debates about the rescue packages, fared very poorly in the election (though this is very likely a consequence of other developments).

To be sure, the relatively strong result of the AfD shows that there is a segment of voters that is very critical of the chosen path and rejects further help for the periphery – and the relative success of the AfD can partially explain the losses of the FDP, although the FDP lost significant more votes than the AfD won in total. In any case, some in the CDU/CSU are likely to view the AfD’s result as a ‘warning shot’, arguing that CDU/CSU should not change course and insist on a policy of ‘quid pro quo’ vis-à-vis the periphery. Coalition talks between CDU/CSU and SPD, should the Conservatives fail to reach an absolute majority, could take a couple of weeks. The main ‘price’ the SPD will demand, we think, is the introduction of an economy-wide minimum wage.

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