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Germany: Political helter-skelter
With an inclination for heavy regulation along the lines of the housing rent cap in the city state of Berlin, where a red-red-green coalition holds sway, such a federal government without the CDU/CSU could undermine the longer-term growth potential of Germany.
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Big announcement: German Chancellor and leader of the Christian Democratic Union (CDU) Angela Merkel speaks during a press conference at the CDU headquarters. (AFP/Tobias Schwarz)
A
fter Merkel’s heir apparent, Annegret Kramp-Karrenbauer (AKK), announced on Monday that she would not lead the CDU into new elections, the pressure on her party to choose a candidate for the chancellorship soon is
growing.
The pro-business Friedrich Merz and the widely respected governor of North Rhine-Westphalia, Armin Laschet, remain the top two contenders to succeed Merkel, followed by health minister Jens Spahn.
However, the key question is not who will strive to follow Merkel. Rather, it is whether the risk that the conservative CDU/CSU may not end up in government at all after new elections is rising or not.
From an economic point of view, only a shift from a coalition in which the CDU/CSU leads the government to one where the Greens team up with the center-left SPD and the left-wing Left Party instead would make a significant difference.
With an inclination for heavy regulation along the lines of the housing rent cap in the city state of Berlin, where a red-red-green coalition holds sway, such a federal government without the CDU/CSU could undermine the longer-term growth potential of Germany.
Near-term, the Thuringia scandal where the right-wing AfD outwitted the CDU/CSU and the liberal FDP could dent support for the CDU at the federal level. It has already done so in Thuringia.
