German Election: What You Need To Know • State Of Play: German Chancellor Angela Merkel has been in power since 2005 and has been the leader of the Christian Democratic Union (CDU) party since 2000. The CDU is currently part of a coalition government with the Social Democratic Party (SPD) and is allied with the Christian Socialist Union (CSU). The alliance is informally referred to as the Union Parties. Merkel and her party enjoy a big lead over SPD and its candidate Martin Schulz, hovering steadily around 40 percent of the vote in recent polling. However, Merkel will likely have to form another coalition government, as she lacks the support to govern with a party majority. • Potential Coalitions: ̶ Black-Yellow: CDU/CSU and Free Democratic Party; seen as most likely ̶ Grand Coalition: A continuation of the CDU/CSU and SPD coalition ̶ Black-Green: A CDU-Green coalition currently governs in two states ̶ "Jamaica": Coalition of CDU/CSU, Free Democratic Party, and the Greens • Election Details: Germany's election system provides voters with a split ballot, where they'll cast one candidate vote and one party vote. ̶ First-Past-The-Post: This vote determines the representative for each constituency ̶ Proportional Representation: This vote, cast for a party, determines the proportion of party delegates allocated among the remaining 299 seats in the Bundestag • What's Next: The General Election is Sunday, September 24. Once results are in, negotiations begin to form a coalition. The chancellor is elected after the coalition government is decided.
Sources: Deutsche Welle; Bloomberg; Legatum Institute Germany's Major Political Parties
Party Ideology/Platform Voter Base Candidate/Leader
CDU/Christian • Fiscally and socially • Older; rural; churchgoers; • Angela Merkel Socialist Union conservative Southern Germany
Social • Social justice, • Working class; unions; • Martin Schulz Democratic worker rights urban; industrial regions Party
Free Democratic • Individual freedom, • Self-employed; business • Christian Lindner Party free enterprise owners
Alternative for • Right-wing; • Lower income; less • Alexander Gauland Germany nationalist education; mostly male • Alice Weidel
The Left Party • Expanded • Former East Germany; • Dietmar Bartsch government role young anti-establishment • Sahra Wagenknecht
The Green Party • Left-wing; • Well-educated; urban; • Cem Özdemir environmentalist increasingly wealthy • Katrin Göring-Eckardt
Source: Deutsche Welle Businesses Appear Less Concerned About The German Election Outcome Than The French Election
German Elections French Elections German Elections By The Numbers 60 60 Europe Europe • 16 out of 17 of U.S. company 55 55 earnings calls that mentioned German Germany France 50 50 elections also mentioned French US US elections, indicating executives & 45 45 analysts grouped the two events 40 40 together* 35 35 • 4x more European company earnings 30 30 calls mentioned French elections than 25 25 German elections in the run-up to both events - 54 calls for France and 20 20 13 for Germany** 15 15 • 48 earnings calls in the U.S. 10 10 mentioned French presidential Total Calls Mentioning Topic** Mentioning Calls Total 5 5 candidates leading up to the election - much more frequently than the 0 0 German Merkel French Macron, single company that has mentioned Elections Elections Fillon, or Merkel in advance of the German Le Pen elections
*In the time period leading up to the French elections **In the four months leading up to each election Chancellor Merkel's CDU Party Has Seen A Steady Increase In Support In Recent Months
Avg. Polling By Party CDU/CSU SPD Green FDP Left AfD Other 45 +22% 40
35
30
25 The Saarland state parliament election 20 kicked off the election year on March 26. Merkel's CDU won more than 40 percent Percent (%) Percent 15 of the vote
10
5
0
9/9/2017
3/11/2017
2/11/2017
1/14/2017
5/13/2017
8/31/2017
7/15/2017
1/28/2017 4/15/2017
8/19/2017
5/27/2017
3/25/2017
6/10/2017
9/16/2017
2/25/2017
7/29/2017
6/24/2017 4/29/2017
Sources: Forschungsgruppe Wahlen; Infratest dimap; Emnid; Deutsche Welle From The "Sick Man of Europe" In The Early 2000s To The Region’s Economic Powerhouse
Italy Germany France United Kingdom 3.0
1.5
0.0
-1.5 Merkel elected Chancellor Germany’s exports were 7.7% of
-3.0 late 2005 global exports in 2011 Real GDP Growth (%) Growth GDP Real -4.5 2001 2003 2005 2007 2009 2011 2013 2015 2017 15
10
5
0
Unemployment Rate (%) Rate Unemployment
2011
2015
2013
2014
2012
2016
2010 2001
2005
2003
2008
2004
2007
2002
2000
2009
2006 2017*
Sources: Eurostat, OECD, Journal of Economic Perspectives *2017 Numbers Are YTD