Germany: Merkel to go into the national election as the favourite - BBH

German Chancellor Merkel will go into the September national election as the favorite and the more interesting uncertainty is her coalition partner, suggests the analysis team at BBH.

Key Quotes

“The Free Democrats are recovering after years in the political wilderness. Instead of an outright majority for the CDU/CSU, a coalition with the FDP is the traditional and preferable strategy. The state races suggest that the change of leadership of the Social Democratic Party has not revived its fortunes.”

“For Merkel, Q3 is about rallying her supporters. It is about avoiding controversial issues, like debt forgiveness of Greece. It is about offering a vision for an EU without the UK and a reliable partner in Washington. For the investor, Q3 may see the strong equity markets of H1 consolidate.”