Close German vote dilutes economic reform hopes

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Nothing happens in Europe without German leadership, according to an old adage. That makes Sunday’s tight election in the region’s biggest economy particularly disconcerting. The Social Democrats’ (SPD) Olaf Scholz and his centre-right rival, Armin Laschet, will each woo the fiscally conservative Free Democrats (FDP) in a bid to form a government. That may dash hopes for big green investments and more flexible European Union budget rules.

Scholz is the ostensible winner based on early projections that give the SPD 25.5% of the vote. But the election is tight enough for Laschet’s Christian Democrat/CSU bloc, on 24.5%, to also seek to form a coalition government. To command a majority in parliament, both men will probably need the support of the Greens and FDP, which came in third and fourth respectively. That gives these two smaller parties scope to extract policy pledges and top jobs.

And the FDP chief’s insistence on debt reduction at a time when many big euro zone countries have much higher budget deficits and debt burdens relative to GDP highlights a different approach to Scholz on the European Union. The FDP leader sees pandemic-era common debt issuance as an aberration and favours the swift reinstatement of EU budget rules rather than discussions on how to make them more flexible.

- The party, whose candidate for chancellor is Olaf Scholz, was on track to win 25.5% of the vote as of 1759 GMT, ahead of 24.5% for the conservative Christian Democrat/CSU bloc.

 

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Why are you ignoring the Linke Party They could also support an SPD/Green coalition to form government.

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