What Could German Election Results Mean for the Eurozone?
All eyes in the eurozone turn toward Germany as elections in the country are due to occur this Sunday. While most believe that Christian Democrat Angela Merkel will win another term as Germany’s chancellor — her party is polling at 38-40 percent, around ten points ahead of rival Social Democrat Peer Steinbruck. It is unclear exactly what line Merkel will take moving forward with respect to the eurozone.
While she has had to tighten up rhetoric during election season because so many Germans have expressed negative attitudes toward policies such as bailouts for Greece and Cyrpus, it is yet to be seen exactly how she will act upon her words should she win.
A determining factor could very well be Merkel’s coalition partners. While Merkel has run a coalition with the right-leaning Free Democrats during her latest term, her first term featured a so-called “Grand Coalition” between the Christian and Social Democratic parties. Though Steinbruck has not reacted to the idea favorably, he may reconsider his options if Merkel cannot build a coalition without his collaboration. Considering her other options, such as the left-leaning Green Party and the vehemently anti-European Union Alternative for Germany Party — which may net the 5 percent vote threshold required to sit in parliament — are not aligned with her party’s objectives, she may have little choice in the matter.