Germany: Political slip hazard - ING

Dhwani Mehta FXStreet

In the view of the analysts at ING bank, “the result of the SPD leadership race will increase tensions within the German government”.

Key Quotes:

“On Saturday, the SPD announced the results of the grassroots vote on the party’s leadership. The duo of the two more leftist critics of the coalition with Chancellor Merkel’s CDU, Norbert Walter-Borjans and Saskia Esken, won the vote, beating Finance Minister Olaf Scholz and his duo partner, Klara Geywitz.

The SPD party convention next weekend will officially vote the new party leaders, but it is highly unlikely that the member vote will not be followed.

Therefore, it is the sheer attempt to renegotiate the coalition agreement and not so much the substance of any new proposals, which is worrisome. Also, don’t forget that the SPD party convention could easily come up with additional pressure to either increase the SPD’s profile in the grand coalition or even a proposal to end the coalition.”

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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