As Germany voted with the highest turnout of 84% since its reunification in 1990, the results were mostly in line with polls. Unions( CDU/CSU ) received the largest vote share at 28.5% with surprise second AfD at 20.8% doubling the last election share. This was followed by the worst performance by the incumbent SPD since World War 2. But the quartile remains when and with whom the coalition government be formed as no one gets the majority needed.
The German financial markets are reacting positively to the results, as DAX futures are up by 1%, and bond yields are expected to open lower. This also has a positive impact on the Euro, as it is up by 0.6% against the dollar.
While the coalition government takes shape, it is going to be one of the most important months in European history as it gets tested against tariffs and a peace deal. The elected Chancellor Merz has also called for a united EU with less or no dependency on the USA.
Europe is having an emergency summit on March 6th and before that French President Is going to meet the US president today. If the road ahead for the EU is to manage its security on its own then it will have to borrow and spend more than in past decades.
Though initial response for a quarter or so might be positive. Being a highly consumer-driven economy a shift in large spending priority will not come at zero cost and a potential large loss in the medium term.
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