Top economists downplay German elections
The Social Democratic Party will be the largest party after Sunday’s German Bundestag elections, with 25.7% of the vote. This is only 1.6 percentage points higher than the CDU / CSU Christian Democrats.
Support from the Liberal FDP or the Green Party should be crucial in determining who can form a government and get the chancellor. According to Robert Bergqvist, chief economist at SEB, it plays a secondary role in economic policy.
– I have great respect for the German elections, but there are many other question marks that will affect the Swedish economy more than the German elections. We are now seeing the characteristics of the global economic crisis, he said.
Germany in the suburbs
Robert Bergqvist mentions the oil crisis in the UK and China, where the economic problems of real estate company Evegrande could affect both the Chinese economy and the whole world economy, as well as the ongoing discussions on the inflation that could push central banks to raise interest rates.
What is happening in Germany is something on the edge of my radar when trying to understand what is affecting the Swedish economy. German policy does not usually offer big surprises, so there is financial predictability, he says.
Even though the German economy – and therefore the Swedish economy – should not be more affected by any party in power in Germany, the choice is not small. Bergqvist says political dynamics in the EU and Germany’s relations with other countries could evolve in different directions depending on whether Schulz from the SPD or Laschet from the CDU eventually take power.
Strong public finances
It also doesn’t stress the importance of long-term government – and perhaps months without news – over Bergqvist either.
The danger is that we get a political vacuum which I think will not affect the German economy and therefore not the Swedish economy. More often than not, economies can grow without a new government, says Robert Bergqvist.
It also creates the security that Europe’s largest economy has the resources.
German public finances are very solid. SEB’s chief economist says they have some leeway to deal with problems if they arise.
Facts: German election result
CDU / CSU: 24.1%
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