|

Over the weekend: German election results putting pressure on Merkel

Over the weekend, a key regional election in the German state of Hesse, which includes the population-heavy city of Frankfurt, saw Chancellor Angela Merkel's CDU/CSU coalition suffer extreme losses in voter confidence, narrowly escaping defeat and sending a warning shot across the bow of Merkel allies that the populace is growing tired of political in-fighting and disenfranchised with the lack of policy results.

Merkel's ruling Christian Democratic Union, currently in a strained coalition with the German Social Democrat Party (SPD), took home just 27.2% of the electoral vote, a steep decline from the previous Hesse election's 38.3% in 2013; the SPD also saw a decline in take-home votes, falling from 30.7% to 19.6%, their worst election results in the region since 1946, and the left side of Merkel's ruling coalition saw themselves on equal footing with their nearest competition, the Greens, who also took 19.6%.

Following the close election results, the SPD's leader, Andrea Nahles, has announced a mid-term review of the current coalition government next year, taking the declining voting numbers as a sign that the German electorate is growing tired of the coalition's constant in-fighting and lack of progress on bringing legislative change to Germany. Nahles' statements put the SPD in-line to withdraw from the current ruling coalition with Merkel's CDU, a move that would see Merkel lose her leadership over Germany after 13 years at the helm.

With political weakness at home, Merkel's ability to lead within the European Union will be increasingly limited as German voters lose confidence in the coalition government, further sending the European Union into political disarray as the European bloc currently wrangles Brexit with the United Kingdom and a spiralling budget crisis with the Italian government, as well as the continued rise of extremist far-right political grassroots campaigns that have been springing up throughout Europe. The anti-immigration, far-right Alternative for Germany (AfD) movement secured 12.8% of the Hesse vote, and is now represented in all 16 electoral assemblies.

Merkel is now headed for a re-election bid in December within her own party, where only 13% of responding CDU voters believe that Merkel has helped the party within Heisse, and this marks the fifth time that Merkel's government has come close to collapsing in on itself from within.

Author

Joshua Gibson

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

More from Joshua Gibson
Share:

Editor's Picks

EUR/USD trims gains, back below 1.1800

EUR/USD now loses some upside momentum, returning to the area below the 1.1800 support as the Greenback manages to regain some composure following the SCOTUS-led pullback earlier in the session.

GBP/USD off highs, recedes to the sub-1.3500 area

Following earlier highs north of 1.3500 the figure, GBP/USD now faces some renewed downside pressure, revisiting the 1.3490 zone as the US Dollar manages to regain some upside impulse in the latter part of the NA session on Friday.

Gold climbs to weekly tops, approaches $5,100/oz

Gold keeps the bid tone well in place at the end of the week, now hitting fresh weekly highs and retargeting the key $5,100 mark per troy ounce. The move higher in the yellow metal comes in response to ongoing geopolitical tensions in the Middle East and modest losses in the US Dollar.

Crypto Today: Bitcoin, Ethereum, XRP rebound as risk appetite improves

Bitcoin rises marginally, nearing the immediate resistance of $68,000 at the time of writing on Friday. Major altcoins, including Ethereum and Ripple, hold key support levels as bulls aim to maintain marginal intraday gains.

Week ahead – Markets brace for heightened volatility as event risk dominates

Dollar strength dominates markets as risk appetite remains subdued. A Supreme Court ruling, geopolitics and Fed developments are in focus. Pivotal Nvidia earnings on Wednesday as investors question tech sector weakness.

Ripple bulls defend key support amid waning retail demand and ETF inflows

XRP ticks up above $1.40 support, but waning retail demand suggests caution. XRP attracts $4 million in spot ETF inflows on Thursday, signaling renewed institutional investor interest.