New Change in Germany
The German election results are in.
Rather than one of the big parties in Germany seeing who their allies might be in a coalition, the Greens and FDP have agreed to talk first.
The agendas of those two parties are nothing alike. FDP is small government and pro business the Greens are for the obvious plus things like open immigration and social justice.
Note that even the Grand Coalition (CDU/CSU + SPD) fails to win a 50% majority. This is the first time a three-way coalition is mandatory for a majority government.
A minority government between CDU/CSU and SPD is possible but unlikely in my view. The previous two Grand Coalitions left a bad taste in SPDs mouth as well as younger voters.
How this is supposed to work is a mystery, nonetheless Two Smaller Parties Have Outsize Influence.
Mr. Laschet said in a televised debate that in a coalition between his party, the Greens and the FDP, “Every party will be able to realize their promises to voters.”
The unusual constellation could become more routine in Germany. The country’s two largest parties have been bleeding votes for decades. Electoral data on Monday showed younger voters had backed the FDP and Greens in much larger numbers than their elders, suggesting that the fragmentation of the political landscape could intensify further.
As the bigger parties compete to woo their smaller peers, the talks are likely to end with whoever becomes Germany’s next chancellor offering extensive concessions to FDP and Greens. At the same time, the two will have to abandon many of their key policies to meet the other’s red lines.
“From the point of view of financial markets, the most important thing is that a [SPD-Greens-Left] government is no option,” Michael Holstein, chief economist at DZ Bank, wrote in a note. “This means there should be no majority for tax rises or new regulations such as a rent cap.”
Coalition Likely Set in Stone
The Greens are much closer in policies to SPD so look for that coalition to lead the government rather than CDU/CSU + Greens + SPD even though that theoretically possible coalition tops 50% as well.
Regardless it may take months to settle on a specific platform.
First Grand Lie
Meanwhile, we have our first Grand Lie already. I assure you Every party will not be able to realize their promises to voters.
However, fully expect the parties to pretend that they did.
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