One of the triggering points behind the recent euro rally has been the announcement of success in German coalition talks to form a grand coalition between the Social Democrats (SPD), Chancellor Angela Merkel’s Conservatives (CDU & CSU) and the Greens. However, we believe that investors have been celebrating too early and we recommend not bringing out your party caps before next Sunday when SPD members from across the country would vote on whether to begin formal negotiations with the Conservatives.
Since the election in September, German political parties failed to form a governing coalition as none received an outright majority and initially, SPD, under the leadership of Martin Schultz ruled out governing along with Conservatives, which they have done for more than a decade now.
On Sunday, 600 SPD members from across the country would gather in the German city of Bonn and vote on the coalition issue.
Anyone, who believe that it is just a formal process with no risk attached, please read the following,
- The Berlin brunch of the SPD Party which will send 23 members to Bonn voted against forming a grand coalition with the Conservatives and that vote came just 2-days after SPD branch in Saxony-Anhalt, a state in eastern Germany, also voted against coalition negotiations.
