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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.

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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.

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