Monday, September 25, 2017
While much of America was focused on whether NFL players were standing for the National Anthem yesterday, the country with the largest economy in the Eurozone held its national elections. As expected, center-right Chancellor Angela Merkel's CDU (and CSU) party won the most parliamentary votes (ensuring her a fourth term), but by less than predicted - and also less than would result in a clear majority for the party, meaning a coalition will need to be reached for the German government going forward.
These election results are not just important because of the size of Germany's economy, but for the position of Merkel and her government on the world stage, whether it be keeping the European Union (EU) intact or emerging as de-facto leader on things like the G-20 summit. Also notable about these results is the emergence of the nationalist Alternative for Germany (AfD), an organization not yet five years old, which scored a major victory with 13% of votes for parliament. In light of history over the past century or so, the AfD may cast an ominous shadow - these are the biggest gains for a far-right party in Germany since World War 2.
It stands to reason that Merkel will not align herself with what some may deem the second-coming of the Nazi party, but neither will it join forces with the center-left Social Democrats (SPD) - itself with the lowest vote totals since World War 2 - which has signaled it stands to operate as First Opposition party to Merkel's Christian Democrats. This may cause some additional problems for CDU/CSU in that it may have difficulty coming to agreement with the Free Democratic Party (FDP, classically liberal), Die Linke (The Left, a left-wing populist and democratic-socialist party) and Grune (the Green party) - all of which did more poorly than AfD.
That's a lot of alphabet soup, but suffice it to say for now that the centrist governing body in Germany looks to have weakened as a result of these elections. Much of this may have revolved around the issue of Syrian and Iraqi refugees being allowed access into the country, which has thus far occurred without much evidence of a resultant boost to Germany's underpinning labor force. This, more than anything, looks to have surged nationalist sentiment and even perhaps the precipitous fall in the Social Democrats' stature, which represented the smallest percentage of party list votes in modern history. Euro stocks are up while value in the euro fell in the wake of these election results.
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