Ahead of the final German Federal election outcome, analysts at ING bank note that “the current result also means that there will now be long coalition talks.”
Additional quotes
“Germany doesn't have a prefab mechanism for these coalition talks and the strongest party does not have an automatic right to lead the next government. “
“In fact, all parties can have exploratory talks in whichever combination they want until they have found a constellation which would have a parliamentarian majority.”
“In the past, there were actually two national elections after which the largest party did not lead the government coalition. With the current results, three coalitions would be possible: an SPD, Greens and FDP coalition, a CDU, Greens and FDP coalition, or another revival of the grand coalition but then under the leadership of the SPD.”
“The option of a left-wing coalition of SPD, Greens and Left Party is no longer possible.”
According to the latest exit polls, the center-left- Social Democratic Party (SPD) is narrowly ahead of Chancellor Angela Merkel's conservative party in Germany’s federal election.
EUR/USD is little changed above 1.1700, unfazed by the German political developments.
