Another random date to circle on your calendar: September 4.
That’s the day when the northeastern German state of Mecklenburg-Vorpommern holds its regional elections.
Nomura’s geopolitical guru Alistair Newton flags it as a key date for Europe this summer, and it makes sense.
We’re at the point where the future of the eurozone hangs on the successful outcome of every tiny vote here and there (one day it’s the Finnish election, the next day it’s the Greek vote of confidence, etc.). All it will take is for one to go wrong, and the whole thing could go boom.
In his NYT column this weekend, economist Tyler Cowen put it wel:
If you are a pessimist, you might see such a response as an unworkable plan of naïve technocrats. Here’s your line of reasoning: At some point along the way, democracy is likely to intervene: either Greek voters will refuse further austerity and foreign domination, or voters from northern Europe will send a clear electoral message that they don’t support bailouts. And there’s a good chance one or both of those events will happen before a broader European bank recapitalization can be achieved. In the meantime, who wants to put extra capital into those ailing Irish, Portuguese, and Spanish banks anyway?
So if the Mecklenburg-Vorpommern election goes sharply against Angela Merkel’s CDU party then that calls into question her overall leadership, her willingness to support more bailouts, and so on and so on.
And if that election goes smooth, then there’s the Berlin regional election on September 18.