Bruno Cavalier (ODDO BHF) | In a few weeks’ time, Angela Merkel will cease to be Chancellor, a position she has held since 2005. Polls show that the three main contenders to succeed her are tied. Despite Germany’s good performance in the first Covid-19 wave, successive waves of contagions brought new restrictions in early 2021, delaying the recovery. Also, Germany clearly suffers from its overexposure to the automotive industry, which is 25 points below normal.
The market reaction to Angela Merkel’s decision has not been bad. The euro depreciated to 1.1373 against the dollar, but sovereign debt suffered more because of the greater risk appetite, and the returns on 10 years German bonds rose to +2.5 bp. However, given that Merkel has held the role of a stabilising figure in Europe, some analysts expect that the long term markets could be concerned by the vacuum she could create with her departure.
Ana Fuentes | “The European leaders will also have to deal with insuring and enlarging a multilateral open system for trade, threatened not only by the US policies, which will lead to Germany having to accept more responsibility within the EU and in the world – and this includes not only the fields of economy and finance,” says Joachim Bitterlich, who was advisor to former Chancellor Helmut Kohl and is currently Professor at the ESCP School in Paris.
The conservative members of Angela Merkel’s Christian Democratic Party (CDU) do not understand that she does not want to put a limit on the number of refugees. And now even her coalition partner in Berlin, the Social Democrats, criticise her for underestimating the scale of the challenge. So to what extent will Merkel be able to impose her ideas? Who can replace her? Is it a viable proposition to integrate all asylum seekers who arrive in Europe?
The Corner | March 23, 2015 | Mario Draghi’s speech will be in focus as traders seek further information on the effect the ECB’s QE programme is having. This week is likely to see strong growth figures posted in the US, while inflation in the eurozone will continue to languish. Greece will again be under the microscope on international markets, as direct talks between leader Alexis Tsipras and German Chancellor Angela Merkel finally get under way.
The Corner | March 20, 2015 | There may be some volatility on European markets in the day ahead, as late night talks between the Greeek government and members of creditor nations, the European Commission and the European Central Bank failed to unlock funds for Athens’ faltering economy.
FRANKFURT| March 19, 2015 | By Lidia Conde | The German economy is posting impressive growth figures, but does the country’s success act as a help or hindrance to it’s European partners?
FRANKFURT | By Lidia Conde | Is austerity at all costs killing us? Germany answers with a resounding “no.” Even though the North-South axis in the European policy is more present than ever, for Berlin “austerity does not punish.” On the contrary: it even purifies. Furthermore, the Stability Pact offers enough flexibility so as to boost growth. There is no room for revision or debate.
MADRID | By Ana Fuentes | Despite British PM David Cameron’s intense campaign against him, Jean-Claude Juncker was chosen as European Commission new president on Friday with 26 out of 28 heads of states’ votes. Candidate of the centre right European People’s party, the largest group in the parliament, and a veteran EU deal-broker, Luxembourg’s former PM vows for increasing the power of Brussels and reducing the voice of nation states. He’ll be officially appointed on July 16 with the strong opposition of the EU’s financial centre.
BARCELONA | By Vinçent Navarro | Germany is not only about minijobs. Although Southern European economies are debating about this measure that Berlin took under Schröder’s government in order to tackle unemployment, much less is said about the German model or ‘Rhineland capitalism’, essentially based on works councils and co-management.