Germany: Political slip hazard - ING

In the view of the analysts at ING bank, “the result of the SPD leadership race will increase tensions within the German government”.

Key Quotes:

“On Saturday, the SPD announced the results of the grassroots vote on the party’s leadership. The duo of the two more leftist critics of the coalition with Chancellor Merkel’s CDU, Norbert Walter-Borjans and Saskia Esken, won the vote, beating Finance Minister Olaf Scholz and his duo partner, Klara Geywitz.

The SPD party convention next weekend will officially vote the new party leaders, but it is highly unlikely that the member vote will not be followed.

Therefore, it is the sheer attempt to renegotiate the coalition agreement and not so much the substance of any new proposals, which is worrisome. Also, don’t forget that the SPD party convention could easily come up with additional pressure to either increase the SPD’s profile in the grand coalition or even a proposal to end the coalition.”