Research Briefing | Sep 27, 2021

Germany | Inconclusive election triggers long-lasting horse-trading

Ipad Frame-Germany-Inconclusive-election-triggers-long-lasting-horse-trading

The federal election has seen a further fragmentation of the vote, which has left Germany with an inconclusive result. A protracted government formation is likely as the centre-right and centre-left blocks try to convince one party from the other side of the political spectrum to join an untested three-party coalition.

What you will learn:

  • The SPD is the narrow winner of the election, but the CDU will also attempt to form a coalition. Both will need the Green party and the liberal FDP to form a majority government, making them the kingmakers. A three-way deal will be tricky to reach, and a renewed CDU-SPD coalition remains a fallback option.
  • We continue to see only limited forecast implications either way. The strong showing of the Green party implies an accelerated green transformation, but the FDP’s support for the debt brake suggests that the impact on investment may be limited.
  • We still see limited room for a significant loosening of the fiscal stance and no real appetite for a fundamental overhaul of the EU’s fiscal rules.
Back to Resource Hub

Related Services

Post

Motor vehicles, energy and the other parts of industry in the line of fire from USMCA tariffs

The potential damage to large swathes of industry in Mexico and Canada from blanket US tariffs could be devastating and significantly greater than the impact on GDP as a whole.

Find Out More
Trade War

Post

The damaging first act of the global trade war

President Trump initiated a global trade war by announcing across-the-board tariffs on Canada, Mexico and China. This development came sooner than we anticipated in our baseline forecast and will lead us to downgrade our 2025 global forecast.

Find Out More