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Germany: Angela Merkel Back in Charge Global Economics & Markets Research Email: [email protected] URL: www.uob.com.sg/research Macro Note Germany: Angela Merkel Back In Charge Monday, 05 March 2018 Germany’s Social Democratic Party (SPD) voted decisively for a coalition with Chancellor Angela Merkel’s conservatives on Sunday, clearing the way for a new government in Europe’s largest economy and ending months of political uncertainty. Suan Teck Kin, CFA In contrast to the Christian Democratic Union (CDU) / Christian Socialist Union (CSU), the SPD Head of Research [email protected] asked their members of which a total 463,723 were eligible to participate in a vote on the coalition treaty via a simple “yes” or “no” decision. The ballot took place between 20 February and 2 Lee Sue Ann March, and the result was published on 4 March, with the “yes” winning 66.02% of the votes Economist [email protected] (78.4% participation rate). From Here… Merkel’s path to chancellorship is now cleared. Federal President FrankWalter Steinmeier will shortly propose Merkel as his candidate for the chancellorship. Merkel needs at least 355 out of 709 votes in the Bundestag to become chancellor again, but given that the CDU/CSU/SPD, with a total of 399 seats, holds a comfortable majority, a defeat for her seems unlikely. Once Merkel is elected on 14 March, she can start nominating her cabinet. Please refer to the next page for Germany’s likely new government going forward. Germany: Angela Merkel Back In Charge Monday, 05 March 2018 1 Page Germany’s Likely New Government Merkel has led Germany for 12 years, and by the end of this new term, she Angela Merkel Chancellor will be tied with fellow CDU predecessors Helmut Kohl and Konrad Adenauer (CDU) in terms of office tenure. Scholz is all but set to be finance minister, and he will likely become vice- Olaf Scholz Finance Minister chancellor as well. Currently the mayor of Hamburg, he is considered the (SPD) high-level SPD politician with the most financial expertise. This is the most-talked about position in the upcoming Cabinet. Sigmar Gabriel would like to continue in his position as head of the Foreign Ministry, Sigmar Gabriel Foreign Minister but after a public spat with former SPD leader Martin Schulz, it looks like (SPD) Gabriel will not be part of the new Cabinet after all. As to who will succeed him? That's still up in the air, but it will be an SPD politician. This will be the first time that the vaguely patriotic "Heimat" concept (roughly Horst Seehofer Minister of the Interior, Heimat and Construction "homeland") is included in a federal minister's domain. Bavaria, however, (CSU) has had a state Heimat Ministry for five years. Von der Leyen has been defense minister since 2013 and has now been Ursula von der Leyen Minister of Defense tapped by Merkel to keep the job. German media has speculated that Von (CDU) der Leyen could be a potential successor to Merkel. Anja Karliczek The ministry's budget was recently increased by EUR11bn to pay for school Minister of Education and Research (CDU) and university improvements, especially with respect to digitalization. Peter Altmaier This would be the first time in more than 50 years that a CDU politician holds Economic and Energy Affairs Minister (CDU) that post. Altmaier is regarded as extremely loyal to the chancellor. The full name of the job Barley has held since June 2017 is minister of family Katarina Barley affairs, senior citizens, women and youth. The trained lawyer may keep the Minister of Family Affairs (SPD) post, but she also may move to a different ministry. In this case, another SPD politician would take her place. Andreas Scheuer Scheuer, considered a close ally of CSU party head Seehofer, could take Minister of Transport and Digital Infrastructure (CSU) over the Transport Ministry. Julia Klöckner Klöckner has been tapped to head the Agriculture Ministry, where she Minister for Food and Agriculture (CDU) worked as parliamentary state secretary from 2009 to 2011. Minister for Economic Cooperation and Development Dorothee Bär (CSU) One of the most likely candidates for development minister is Dorothee Bär. Eva Högl Högl could take over the Labor Ministry from Andrea Nahles, who is now Minister of Labor and Social Affairs (SPD) head of the SPD parliamentary party and designated party leader. Maas was justice minister during the last government's term, and he could Heiko Maas Minister of Justice and Consumer Protection keep the job. However, he is also on the list of candidates for the job of (SPD) foreign minister of minister of labor. Merkel's nominee for health minister stands out: The 37-year-old Jens Spahn Jens Spahn Minister for Health not only represents a new political generation within the CDU, but was also (CDU) heavily critical of Merkel's welcoming policy toward refugees. Germany's current minister for the environment, nature conservation and Barbara Hendricks Minister for the Environment nuclear safety has reached retirement age. But Hendricks may well continue (SPD) on in her job. Helge Braun, who is currently minister of state at the Chancellery, has been Helge Braun Chief of Staff at the Chancellery nominated by Merkel for the promotion to Chancellery head. He would take (CDU) over from Peter Altmaier. Source: Various News Reports, UOB Global Economics & Markets Research Recent Publications 02 Mar Macro+FX Strategy: US - President Trump Announces Impending Steel & Aluminum Tariffs 01 Mar Italy’s Looming Election 01 Mar US: Hawkish Hints From Powell’s First House Testimony Stir Markets 01 Mar Malaysia: BNM To Keep Neutral Stance Amid Slower Inflation 28 Feb Rates Strategy: Money Market Rates Turn Higher In February Disclaimer: This analysis is based on information available to the public. Although the information contained herein is believed to be reliable, UOB Group makes no representation as to the accuracy or completeness. Also, opinions and predictions contained herein reflect our opinion as of date of the analysis and are subject to change without notice. UOB Group may have positions in, and may effect transactions in, currencies and financial products mentioned herein. Prior to entering into any proposed transaction, without reliance upon UOB Group or its affiliates, the reader should determine, the economic risks and merits, as well as the legal, tax and accounting characterizations and consequences, of the transaction and that the reader is able to assume these risks. This document and its contents are proprietary information and products of UOB Group and may not be reproduced or otherwise. Singapore Company Reg No. 193500026Z.
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