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.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.