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Have elections weakened Iron Chancellor?

Monday, March 14, 2016 - 01:35

German bonds underperforming a day after voters punished Chancellor Angela Merkel's conservatives in three German regional elections. As Sonia Legg reports, investors are getting nervous about the impact of Merkel's falling popularity on the economy.

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The headlines talk of shock after Germany's weekend elections. With many now questioning Angela Merkel's handling of the migrant crisis. Voters in three regions punished the Chancellor's conservatives, many flocking to the new anti-immigration party AfD. Stocks merely shuddered but there's concern an element of political risk has crept in. SOUNDBITE: IG Market Analyst, Chris Beauchamp, saying (English): "I think these elections are a wake up call in the sense that they show us Angela Merkel is not quite the iron chancellor we thought she was a few months ago. Her standing is much weaker, she is looking much more friendless in the broader European sphere which is particularly worrying because we know how friendly she has been to Mario Draghi." Germany took 1.1 million migrants last year and more are coming this year. That's stoked fears that Europe's economic power house is being overrun - and made its political picture more complicated. SOUNDBITE: Berlin Free University Political Scientist, Gero Neugebauer, saying (English): "The landscape in Germany changes because we have now a party at the right wing. In former times we had only big conservative parties, but now we have a small right populist party and that is new for Germany." But other European countries already have right wing elements - and in some, like France, they're far stronger. SOUNDBITE: Baader Bank Head of Capital Markets Analysis, Robert Halver, saying (German): "I think the results of the AfD won't have a sustainable influence. Looking at Europe, there is almost no country without parties from left and right, Germany has just joined the real world." Merkel's real world has changed too though. And anything that threatens Germany's economic strength will worry investors - especially when they're already anxious about a global slowdown.

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Have elections weakened Iron Chancellor?

Monday, March 14, 2016 - 01:35