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Will the German economy live or die under the next coalition: Ifo experts

Supporters of the Social Democratic Party of Germany (SPD) will attend an election campaign rally in Berlin, Germany, on August 27, 2021.

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The resignation of Chancellor Angela Merkel after the German federal elections on Sunday could dramatically change the country’s priorities. In particular, power can soon be shared among new and more unpredictable political forces.

Like the current government, it is virtually certain that the next government will be a coalition, but it is far less certain which party will create or control a governing alliance.

What the next coalition will take will undoubtedly have a major impact on Europe’s largest and arguably the most important German economy.

In 2019, Germany generated almost a quarter (24.7%) of the EU’s gross domestic product. According to EurostatAnd so how the country is governed-at the time of the transition from the perspective of world trade and consumer trends-is important.

Elections are still widespread, with the Social Democratic Party on the left still in the lead in the latest voter vote on Monday, with 25% of the votes cast, but the maintenance of the CDU-CSU (Christian Democratic Union). Alliance has been shown to be dominant. The Union and the Christian Social Union) have closed the gap and are currently in a position to win 22% of the votes. Meanwhile, according to the Bild Insa poll, the Greens lag behind in 15% of the votes.

A new coalition needs to be formed after the vote, and German economists say that certain alliances can have “massive consequences” on the country’s economy.

“Large-scale results”

Germany’s respected Ifo Institute and the newspaper Frankfurter Allgemeine Zeitung surveyed 153 economists at German universities and found out how the formation of various coalitions contributed to Germany’s economic growth, unemployment, public debt and income inequality. I asked if it would affect me.

For each of these measures, respondents were asked under which coalition the highest and lowest levels could be expected at the end of the next legislative period.

According to a survey released on Tuesday, 83% of German economists polled were the product of the Left Party, the so-called “Red / Red / Green” coalition of SPDs, with the lowest economic growth rate. I believed that. ) And green.

Ifo’s researcher and professor Niclas Potravke said on Tuesday that such a coalition of left-wing parties “has made a big difference in policy direction, with higher taxes and more government relocations.” It will lead to different economic policies. ” It also has a great impact on the real economy. “

A total of 77% of economists expect the “red / red / green” alliance to lead to the highest unemployment rate in addition to achieving the lowest economic growth, and believe that 86% have the highest national debt. I said there is. However, 55% of economists also believe that such a leftist alliance will achieve the greatest net reduction in income inequality.

The devil you know

Perhaps not surprisingly, 44% of economists believed that the ruling CDU-CSU alliance and the Pro-Business FDP coalition (the “black / yellow” coalition) would achieve the highest growth rates in Germany, but the group It lacks a majority. It will be the current poll.

The “Black / Yellow” coalition will achieve the lowest unemployment rate according to 43% and the lowest public debt ratio according to 73% of economists.

This prosperity can come at a cost to many, with 70% of economists believing that such a coalition leads to the greatest net income inequality, and 56% of it in all alliances. We believe that it will lead to the maximum carbon emissions.

A cocurry plant in the German industrial conglomerate ThyssenKrupp on the Rhine in Duisburg in western Germany in 2019.

INA Fassbender | AFP | Getty Images

In second place, 18% of economists believe that the SPD, Greens and FDP coalition (commonly referred to as the “traffic light coalition”) will bring the highest economic growth, and 18% of the CDU-CSU, Greens, and FDP (known as the “Jamaica” coalition).

“If a so-called traffic light or Jamaica coalition is formed, respondents believe that the impact on growth, inequality, public debt ratios, unemployment and carbon emissions will be more subdued,” said Potravke. ..

Widely open poll

Currently, there are a variety of simultaneous options, most of which face formation obstacles. In short, policy differences between political parties in areas ranging from economics to climate goals can prolong post-election negotiations.

“It may take some time to form a coalition,” a macro-analyst at Teneo Intelligence said in a memo on Monday.

“Within a week of federal elections on September 26, the Social Democratic Party continues to lead polls, but the Christian alliance seems to have recovered to some extent, but even if the SPD wins, This does not necessarily mean the Minister of Finance. Olav Schortz will be the next prime minister. CDU / CSU candidate Armin Rachette is, for example, an alternative government between the Greens and the Central Right Liberal Party (FDP). By trying to form, you may try to defeat the Shorts. “

Journalists and party members see the screens of Press Center (LR) Olav Schortz, German Finance Minister, Deputy Prime Minister, Social Democratic Party (SPD) Prime Minister and Candidate Armin Laschet, North Rhein Westfalia Prime Minister, Christian Democratic Union I am. (CDU) Candidate Prime Minister attending an election television debate in Berlin on September 12.

JOHN MACDOUGALL | AFP | Getty Images

The CDU-CSU is in power, but everything could change after the next Sunday’s vote. Both SPD and Greens candidates for Prime Minister Olaf Scholz and Annalena Baerbock suggest that they are less motivated to join forces with the CDU-CSU.

“I think 16 years later, I think many voters want the CDU to finally oppose it again,” Scholz said during the final television debate between the prime minister’s main candidates on Sunday.

Will the German economy live or die under the next coalition: Ifo experts

Source link Will the German economy live or die under the next coalition: Ifo experts

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