The most likely outcome of the federal election on 22 September is that Angela Merkel (CDU) will continue as Chancellor.
Opinion polls give CDU/CSU and the junior coalition partner FDP a slim majority in the Bundestag, while Peer Steinbrück's SPD and Greens coalition is lagging behind.
However, the FDP is struggling to stay above the 5% threshold. If both coalitions fail to win a majority in the Bundestag, a broad CDU-SPD coalition cannot be ruled out.
Both the current coalitions and a possible broad CDU-SPD coalition are pro euro. Euro-sceptic Alternative für Deutschland has only around 3% of the votes in the polls.
Nevertheless, the elections are important, because sensitive European issues have de facto been paused in order not to upset the German voters.
Thus, we expect progress on issues from the Banking Union to Greek debt forgiveness to gain renewed momentum after the elections, no matter who wins.
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