NN IP: Elections in Germany - Financial markets only partly affected by possible change of direction

NN IP: Elections in Germany - Financial markets only partly affected by possible change of direction

September 21, 2021

Politics Germany
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Now that the pandemic is becoming part of a new normal, voters have the opportunity to vote on this strategic realignment. Germany kicks things off with the German parliamentary elections on September 26, followed by the French presidential elections in April 2022, and Americans vote on Biden's policies in the midterm elections in November 2022.

Marco Willner, Head of Investment Strategy at NN Investment Partners (NN IP) believes these elections are important milestones in determining whether we will see a progressive turnaround in the developed world this decade. In such a movement, the political focus would be on issues such as inequality and climate protection. In the coming weeks and months, we will keep an eye on the long-term impact of this development on the markets.

Willner on the German parliamentary elections:

‘’Our basic scenario for the upcoming German government is a three-party coalition with a broad coalition agreement, a somewhat more progressive approach, a pro-European orientation and moderately rising spending in the coming years. From a market perspective, it would be important for the CDU/CSU and the FDP to be flexible on the issue of the debt cap in order to be able to respond to demands from the left-wing bloc. On the other hand, the next government is likely to be made up of both blocs. For this reason, the debt cap will always remain an issue and limit the scope for more debt.’’

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