PGIM Fixed Income's Katharine Neiss: Radical reforms unlikely as German polls point to Friedrich Merz

Snap elections 'unusual' in Germany

clock • 5 min read

Following the dramatic breakdown of the coalition under Chancellor Olaf Scholz on the day of US President Donald Trump’s election win, Germany is now facing snap elections on 23 February.

Since World War II, political stability has been hard-wired into the German political system. Snap elections are, therefore, quite unusual.  The unexpectedly early election speaks volumes to the political paralysis in the face of economic stagnation the country has faced since Russia's invasion of Ukraine. The economic challenges facing the country are acute. Germany's economy has shrunk in the last two years and is not expected to grow by more than a couple of tenths in 2025.  The recent economic weakness stands in sharp contrast to the 2% average annual real growth rate the count...

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