Merkel Tanks In German Polls As Critical Discussions Take Place With SPD

Angela’s Merkel’s ability to restore her power in Germany should be decided in the next few days, as talks take place with Martin Schultz’s SPD.

In the meantime, Merkel’s ratings have unexpectedly “tanked” in the latest German polls. More than half of Germans believe she should not run for office in a poll conducted for t-online.com, as the Daily Express reports.

Angela Merkel’s worries continue as the latest polls reveal the majority of Germans did not want her to run as a candidate for Chancellor again. The survey, carried out in the coalition talks breakdown, makes worrying reading for Angela Merkel. While Mrs Merkel said yesterday she wanted to stand again in any new snap election the German people appear to be turned off by the prospect.

Of those polled, 54 per cent said she should not run for office, according to the polling institute Civey for t-online.de. Only 38.5 percent of Germans would welcome a renewed candidacy of the chancellor. A breakdown of those views saw Mrs Merkel pick up 76.2 per cent support amongst the supporters of the Christian Democratic Union (CDU) and the Christian Social Union (CSU) which stood at 76.2 per cent.

 

Amongst supporters of the Greens, Mrs Merkel also seemed to gain a sizeable backing with 52.2 per cent wanting the current leader to stand again. Among the FDP supporters that was only about 30 per cent. Perhaps unsurprisingly supporters of the right-wing Alternative for Germany (AfD) do not want her to stand again with 88.5 per cent calling on her to step back.

There was little comfort for the German leader in another poll published yesterday in Der Spiegel.

The latest SPON poll indicated that support for the coalition between Mrs Merkel’s CDU and the CSU fell below 30 per cent to 29.2 per cent. This is believed to be their lowest ever level. The polling institute Civey, based in Berlin, indicated the fall is part of a downward trend for the two parties.

There was no joy though either for the main opposition party the Social Democrats (SPD) which also suffered a decline in popularity. Leader Martin Schulz saw the support for his party drop to 19.5 per cent, its lowest level since December 2016. A similar fate was suffered by the AfD which had been making progress in popularity recently. The latest poll shows the party has fallen by 1.5 per cent points since negotiations over forming a new coalition had failed. It is now at to 13.6 per cent.

The FDP, which ruled out a forming a “Jamaican coalition” with Merkel and the Greens, rose 1.7% to 13.3% and the Greens rose 1.5% to 11.9%. The co-founder of the Greens, Hans-Christian Strobele said recently.

"The end of the chancellorship of Angela Merkel has already been announced by the outcome of the general election. "Now Merkel"s political end can indeed come very quickly. In my opinion, Mrs Merkel will not be able to stay at the top of the government for much longer."

After the “Jamaican Coalition” talks broke down, Merkel indicated her preference for a new election, rather than ruling with a minority. However, we suspected it was a bluff to scare other parties back to the negotiating table. On this note there are signs of progress. Merkel’s former “Grand Coalition” partner, the SPD, has been under pressure support Merkel to secure Germany’s stability. According to Bloomberg.

Germany’s biggest opposition party is ready to begin talks with Angela Merkel on a minority government, offering her a way to restore political leadership in Europe’s biggest economy.

It’s the first sign the Social Democratic Party is ready to help the chancellor stay in office after her talks on forming a coalition with three other parties fell apart. SPD head Martin Schulz, who faces party pressure to go further and disavow his refusal to join a Merkel government, is meeting Germany’s president on Thursday for consultations on the way forward.

SPD officials are making positive noises about shoring up Merkel and German stability, which could include ditching Schulz. Bloomberg continues.

“Of course we want to help Germany and we haven’t ruled out anything,” SPD lawmaker Karl Lauterbach said in a ZDF television interview. That includes the option of a “grand coalition” with Merkel’s Christian Democrat-led bloc as a last resort, he said. Schulz, who led the SPD to its worst result since World War II in September, faces increasing pressure within the party to step aside, a move that might help clear the way for a grand coalition.

He is ready to hold talks with Merkel and is prepared to back her in a minority government, though he won’t offer another grand coalition, according to a person familiar with his thinking who asked not to be identified. Schulz will inform President Frank-Walter Steinmeier of his plan at their one-on-one meeting in Berlin, the person said.

Germany’s political establishment is in turmoil but, in its quest for stability, we can’t rule out a rapid resurgence in Merkel"s at the head of a reformed Grand Coalition, if Schulz is sacrificed. In the meantime, Merkel is almost making Theresa May’s position look stable.
 

Gold, Euro Slump As Merkel Admits "New Elections Are The Better Way"

EURUSD is testing overnight lows (and gold is tumbling) after German Chancellor Angela Merkel said she would prefer to go ahead with new federal elections rather than try to form a minority government.

 

Seeking her fourth term, Bloomberg reports that Merkel is “skeptical” about a minority government as it may not bring about necessary stability and is open to another so-called grand coalition with the Social Democratic party, she said in an interview with ARD television.

In the absence of an agreement to secure a majority in Germany’s Bundestag, “I’m certain that new elections are the better way,” she said.

And FX markets reacted...

With German Polls Closing, Merkel Looks To Historic 4th Term In Office; Far-Right AfD Set To Enter Bundestag

With polls closing shortly, Germany voted on Sunday in the country"s federal elections, with long-serving Chancellor Angela Merkel looks certain to win a historic fourth term in office (see full preview here). Absent last minute drama, the poll is also expected to see the right-wing Alternative for Germany (AfD) entering parliament for the first time. The only outstanding question today is which other party or parties will join the chancellor’s Christian Democrats coalition in her new government

Polls opened at 8am (06:00 GMT) and first projections are expected when the polls close at 6pm.

German President Frank-Walter Steinmeier urged people to go vote. "Voting is a civic duty. Go and vote!" Steinmeier wrote in an opinion piece published in the Bild am Sonntag Sunday newspaper. "Every vote counts - your vote counts," Steinmeier doubled down, hoping to avoid the recent plunge in voter participation observed in France. "People who don"t vote allow others to decide the future of our country."

Some 61.5 million people are eligible to vote, and turnout was expected to be higher than the 71.5% of voters who turned up at the polls at the last election four years ago, however amid overcast skies and rain in much of Germany, turnout was little changed from the previous election in 2013, reaching 41.1% at 2 p.m. Berlin time, four hours before the close of voting.

Regardless of participation, the winner is certain: opinion polls suggest Merkel and her party are heading for a clear win, which would gift Merkel a historic fourth term. Merkel’s bloc, which includes her Bavarian allies in the Christian Social Union, had the support of just about 37 percent of voters in the final opinion polls during the campaign.

That’s about 15 percentage points ahead of its main challenger and current coalition partner, Martin Schulz’s Social Democrats. According to Bloomberg, four other parties -- the pro-business Free Democrats, the Greens, the anti-capitalist Left and, for the first time ever, the populist Alternative for Germany, or AfD, are poised to win seats in the lower house of parliament, the Bundestag

A fourth victory for the Chancellor would crown a remarkable comeback for Merkel from a plunge in her popularity amid the 2015-16 refugee crisis that saw 1.3 million migrants flood into Germany. Early this year, she was equal in the polls with Schulz, a fresh face in German domestic politics, but the Social Democrat’s challenge has faded in recent months and his party threatens to post its worst result since World War II. Merkel, 63 and chancellor for 12 years, has portrayed herself during the campaign as a beacon of stability in a world buffeted by crises.

Angela Merkel casts her vote in Germany"s general election #GermanyDecides pic.twitter.com/ei5VQyXxk9

— AFP news agency (@AFP) September 24, 2017

"There is no other European politician who could remotely match her in terms of her longevity, her credibility among her own people," said Al Jazeera"s Laurence Lee, reporting from Berlin. "It is impossible to imagine a conservative politician or even one from the left in any other European country taking in a million refugees and surviving politically."

“Despite everyone saying this election is boring, it’s actually crucial from a geo-strategic point of view,” Judy Dempsie, a senior associate at Carnegie Europe, said in a Bloomberg Television interview. The result will determine what kind of a partner the U.S. has in Europe on issues such as North Korea, she said. “Whoever wins the election on Sunday will have to become far more involved in these major geo-strategic issues that are outside Europe.”

In terms of preferred outcomes, Merkel"s Christian Democrats (CDU) can hope for a narrow majority with the pro-business Free Democrats (FDP), or the environmentalist Greens, or an untried coalition with both.

Alternatively, the CDU will continue its so-called grand coalition of the biggest parties with the centre-left Social Democratic Party (SPD), which has seen its support erode to a historic low over the past decade. Martin Schulz, the SPD candidate and Merkel"s main contender, is stuck in polls of about 20 percent support, and has been unable to make any headway against the CDU.

The biggest surprise, however, the nationalist Alternative for Germany (AfD) is expected to take at least 60 parliamentary seats in the election, after having narrowly failed to clear the 5% hurdle to enter parliament in 2013. It would be the first time in 60 years that a far-right party is represented in the Bundestag. AfD has been saying it will press for Merkel to be "severely punished" for opening the door to refugees and migrants, and attacked Islam by saying it "does not belong in Germany".

The outcome of today"s election is also being closely watched in Paris, where President Emmanuel Macron is proposing measures to deepen integration in the euro area that depend on the support of Germany, Europe’s biggest economy as well as its dominant country under Merkel.

Once voting ends at 6pm local time, television exit polls will reveal if the chancellor has managed to outperform expectations as she did in the previous election in 2013. If the CDU/CSU and the FDP can get to a combined 48.5 percent or so - a level they’ve not managed in polling since late August - that would allow Merkel to reprise the business-friendly coalition she led from 2009 to 2013, according to Bloomberg.

If not, she has two alternatives: as noted above, the first is to try to add the environmentalist Greens to that coalition with the FDP, but it’s a combination previously untested at national level. The easier option might be to continue the “grand coalition” with the SPD, though that would face resistance among grassroots Social Democrats who would prefer to go into opposition. While agreement on a CDU-FDP coalition might take just a few weeks, other options could see talks dragging on for months.

Whatever the final distribution of seats, a fourth election victory for Merkel, western Europe’s most powerful political leader, would equal those for her CDU predecessors Konrad Adenauer, the first postwar chancellor, and Helmut Kohl, who oversaw German reunification in 1990. She’s said she plans to serve a full four-year term, which would equal Kohl’s record 16 years in office

Merkel, Schulz Agree: "It's Clear, Turkey Should Not Become An EU Member"

Having blasted Germany for "abetting terrorists," Turkish president Edrogan was on the receiving end of some ire this weekend as the refugee crisis and the EU deal with Turkey dominated the TV debate between Chancellor Angela Merkel and her coalition ally SPD challenger Martin Schulz on Sunday.

The rivals agreed, however, that Turkey can’t be part of the EU.

"If I become German chancellor, if the people of this country give me a mandate, then I will propose to the European Council that we end the membership talks with Turkey. Now all red lines are crossed, so this country can no longer become a member of the EU,”said Schulz during the debate, forcing the CDU leader to clarify her position on the issue.

“The fact is clear that Turkey should not become a member of the EU,”said Merkel, agreeing with Schulz.

“I’ll speak to my [EU] colleagues to see if we can reach a joint position on this so that we can end these accession talks,” added Merkel, who is hoping to get re-elected for a fourth term.

As RT notes, the government in Ankara is moving away from democratic principles at a “breathtaking” speed, Merkel said, adding that at the moment “the accession negotiations are non-existent.”

However, she refused to completely freeze the relationship with Turkey.

Additionally, Reuters reports that the actions of the Turkish authorities are making it “impossible” for the country to join the European Union, an EU executive said on Monday after German Chancellor Angela Merkel called for ending accession talks.

Quoting European Commission President Jean-Claude Juncker from last week, before Merkel’s election campaign comment, the Commission’s chief spokesman told a regular news briefing:

“Turkey is taking giant strides away from Europe and that is making it impossible for Turkey to join the European Union.”

He stressed, however, that any decision on whether to formally halt the long-stalled membership process would be up to the 28 member states of the bloc, not the Brussels executive.

Turkey has been receiving funding from the EU, which will reach €6 billion by 2018, as part of the deal to halt the migrant flow into Europe, signed in March 2016. Turkey was also promised visa free travel and expedited talks on joining the EU, but the discussion of those issues remains stalled due to Ankara’s refusal to relax its harsh anti-terrorism laws. As EU-Turkish ties hang in the balance, President Recep Tayyip Erdogan has been actively reiterating his threats to withdraw from the deal and again allow migrants to pour into the EU.

"White Supremacist","Gentle Giant" James Fields Denied Bail, Said "Hitler's Policies Were Good"

Charlottesville car attack driver James Fields, described both as a "gentle giant" by some and "hard-core pro-Hitler" by others who know him, was ordered held without bond Monday as he faces second degree murder and other charges for ramming the grey car into the crowd, killing a 32-year-old woman and injuring 19 others.

As NYDailyNews.com reports, Fields appeared via video in Charlottesville court wearing a black and white collared jumpsuit. No cameras were allowed to film or photograph the proceeding. Mr. Fields was charged with one count of second-degree murder, three counts of malicious wounding and one count of hit and run, according to local police.  His only words were “yes sir” and “no sir” to Judge Robert Downer’s questions.

The 20 year old man was remembered as a quiet student by a school principal and a fellow classmate, but a former teacher said he also espoused white-supremacist views.

“From what I remember, he was a quiet and reserved student,” Michael Wilson, principal at Randall K. Cooper High School in Union, Ky. said in an email. “Our thoughts and prayers are with those in Charlottesville, Virginia. Hatred and violence is never a viable solution to any problem. As educators, we are always using teachable moments and providing guidance to students to create college, career and life ready students to make good and sound choices.”

The Wall Street Journal reports that Mr. Fields joined the Army shortly after high school and reported to basic training in August 2015.

“He was, however, released from active duty due to a failure to meet training standards in December of 2015,” Lt. Col. Jennifer Johnson, an Army spokeswoman, said in an email. She didn’t elaborate on how he failed to meet standards.

“As a result he was never awarded a military occupational skill nor was he assigned to a unit outside of basic training,” Lt. Col. Johnson said.

Mr. Fields’s father died in a car accident while Ms. Bloom was pregnant, according to David Young, a former neighbor who said he knew Ms. Bloom and her son in Florence, Ky., when Mr. Fields was a young boy.

Fields" mother, Samantha Bloom, said that her son had told her he was going to a rally, which she thought “had something to do with Trump.”

A high school teacher said Fields was fascinated with Nazism, idolized Adolf Hitler and had been singled out by school officials in the 9th grade for his “deeply held, radical” convictions on race.

As a freshman, the student turned in an assignment to another teacher that expressed views that “the Nazis were good, their policies were good, Adolf Hitler was a great leader,” Mr. Weimer recalled in an interview. “In a nutshell, the white race is superior—that was the general thrust,” he said.

During Mr. Fields’s junior and senior years, Mr. Weimer taught him two classes, world civilization and a course on modern U.S. wars. Mr. Fields chose to study the Waffen SS—the military wing of the Nazi Party—for an in-depth research paper, Mr. Weimer said. While Mr. Fields did well on the assignment, it was “hard-core pro-German,” his former teacher said.

Mr. Weimer said Mr. Fields would often steer class discussions on topics that had nothing to do with Nazism to “pro-Hitler stuff, pro-white supremacy stuff.”

One high-school classmate wrote in a blog post Sunday that he remembered Mr. Fields as a “gentle giant” who was kind and shy when spoken to.

Mr. Weimer said he had a good rapport with Mr. Fields, who he said tried to marshal facts in support of his arguments and wasn’t combative toward him or Mr. Fields’s classmates.

“I used all these tricks to really ram home how evil and wrong the Nazis were, how we live in the greatest country,” Mr. Weimer said.

“I definitely feel like I failed.”

Shock Poll Shows Merkel Losing Chancellorship If Elections Held Today; JPMorgan Stunned

Overnight we reported that Germany"s default swaps spiked to the highest level since Brexit as a recent poll showed that Merkel"s lead in the polls had slid to multi-year lows ahead of Germany"s elections later in the year, provoking some concerns that a formerly unthinkable "tail risk" outcome was becoming more likely. However, according to new data unveiled today, Merkel"s headaches are only just starting, because in a brand new poll released this afternoon, the CDU would get 30% of the vote, while the suddenly resurgent SPD would get 31%. This means that the SPD"s new head, Martin Schulz, would enter any coalition talks as the leader of the largest party, hence becoming Chancellor, leading to a stunned reaction by JPMorgan.

In a note released this afternoon by JPM"s Greg Fuzesi, the strategist writes that following the recent resignation of Sigmar Gabriel as leader and chancellor candidate of the SPD, there has been much attention on how his replacement Martin Schulz would perform. Having spent most of his career in the European Parliament, most recently as its president, and being relatively unknown in Germany, this is not easy to predict. In his first major TV interview, he was recently pressed to explain how exactly he differs from his predecessor Gabriel and also from Chancellor Merkel, and what his focus on fairness would mean in practice. This was not entirely straightforward for him.

Nevertheless, opinion polls were beginning to show a bounce last week and this appears to be continuing.

This afternoon, a new opinion poll from INSA showed the SPD gaining further support and overtaking the CDU/CSU for the first time in many years. If elections were held now, the INSA poll suggests that the CDU would get 30% of the vote, while the SPD would get 31%. This means that Schulz would enter any coalition talks as the leader of the largest party, hence becoming Chancellor.

It also means that a SPD-Green-Left coalition would currently win exactly 50% of seats, so that a government without the CDU/CSU could even be possible. In effect, the SPD has gained 10%-pts of support in past two (weekly) INSA polls, taking votes away from all other parties (see second chart below). Interestingly, the AfD has also suffered a significant decline.

Given that Schulz is relatively new to German politics, a novelty factor may be partly responsible for the jump in the polls. It is far too early to say whether this will endure, given that the election campaign has yet to properly begin. It will also be important to see whether other polls replicate the swing. The SPD has gained support in all recent polls, but these are all a week or more old and do not show the latest jump in the INSA poll. That said, there is no reason to dismiss the INSA poll. It is the newest organization and the only one to be done entirely online, but it (arguably) performed only marginally worse than other polls at the last Bundestag election.

A Schulz-led SPD-Green-Left coalition or a Schulz-led grand coalition would certainly be a huge event in German politics. Such possibilities no longer look like tail risks. A SPD-Green-Left coalition would bias German policymaking towards greater fiscal expenditure and investment, and center-left policies. But, even such a coalition would not mark a dramatic break with the past in many areas and would, we expect, continue Germany’s strong support of the EU and single currency.

In short, "Chancellor Schulz" may be just what Brussels, and to a lesser extent President Trump, ordered.