Europe | Germany — starting point for the cycle of elections

Summary

The election results show a very open electoral landscape—with a narrow victory by the SPD. These elections are important because they signal the start of an electoral cycle in the major European countries, within a context plagued with problems needing to be resolved.

Key points

• Key points:
• Some of these problems include the post-pandemic normalization, the management of NGEU funds, the setting out of trade and defense policies or plans for greater European tax integration.
• The two most-likely coalitions, at the end of what are expected to be lengthy talks on forming a government, include the Greens and the liberal FDP as minority partners in a government led either by the Social Democrat's Olaf Scholz or the candidate of teh CDU-CSU, Armin Laschet.
• In relation to European economic policy (of which there was very little mention in the electoral campaign), a key element to look out for in the upcoming negotiations will be the extent to which the new government sticks to the pro-European line followed by Angela Merkel in recent years.
• In the future, one of the debates in Germany will be the potential change in its domestic tax rules, that demand a zero budget deficit despite the clear need for public investment, and not only because of the challenges posed by climate change.

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