Germany: Coalition risks and reform hurdles – Commerzbank
Commerzbank’s Dr. Ralph Solveen analyzes how the Saxony-Anhalt election and two subsequent votes in Berlin and Mecklenburg-Western Pomerania could strain Germany’s CDU/CSU–SPD coalition.
Commerzbank's Dr. Ralph Solveen examines how upcoming elections in Saxony-Anhalt, Berlin, and Mecklenburg-Western Pomerania may strain Germany's CDU/CSU–SPD coalition. He foresees likely poor performance for traditional parties, potential leadership changes within the SPD, and divergent policy responses to the growth of the AfD.
The potential federal reforms are expected to become more challenging due to the coalition's likely poor showing, but Solveen believes the coalition will survive. For financial markets, the election's impact is primarily on the current governing coalition, the CDU, CSU, and SPD at the federal level. However, the poor results in the Eastern German states could further complicate the planned reforms and coalition cooperation. A minority government reliant on AfD support would risk the federal coalition.
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