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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
GERMANY
The smallest party in the federal coalition, the pro-business liberal Free Democratic Party (FDP), will hold an internal vote among party members asking whether they approve of the party's continued participation in the 'traffic light' coalition after lawmaker Matthias Nölke from the state of Hesse gathered the requisite signatures to force the vote. Nölke claimed to Bild that "The traffic lights in Berlin are dragging the FDP into the abyss".
- The vote of around 76,100 party members will not be binding on the leadership. However, should the ballot go against the continuation of the current governing arrangement alongside Chancellor Olaf Scholz's centre-left Social Democrats (SPD) and the environmentalist Greens then it could significantly weaken party leader, Finance Minister Christian Lindner.
- The stability of the gov't was rocked by a ruling from the Constitutional Court last week, that an off-budget fund intended to back Germany's green transition using unspent COVID-19 recovery funds was unconstitutional, blowing a EUR60bn hole in the gov'ts plans and resulting in theindefinite delay of the 2024 budget.
- Lindner will have painful memories of the FDP's last internal vote in 2011, where eurosceptic members voted against a permanent euro zone bailout scheme. The furore around the issue cost Lindner his position as FDP General Secretary and critically weakened then-leader Philipp Roesler.
- The federal coalition remains reliant on continued FDP support. The loss of their 92 members would see the SPD-Green coalition fall under the majority threshold (see chart below). The options then would be the continuation of a vulnerable minority gov't, bringing the centre-right CDU/CSU into gov't, or snap elections.
Chart 1. Bundestag, Seats
Source: Bundestag.de
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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