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🚦 "Traffic Light", "Red-Greens" or "Jamaica": Which is More Dangerous for the Euro?⠀
🔔 The election result is guaranteed by the hard process of building a new German coalition. Instead of the historical alliance of the two parties, a third partner is now needed to form a government with a parliamentary majority. SDP has been a junior partner of the Merkel bloc for 16 years, but the current result may well leave the CDU/CSU in opposition.
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The basic principles of the SDP concerning the Eurozone are the introduction of Eurobonds and the transformation of the EU into a kind of European analogue of the United States. A coalition with the GRÜNE party, which at least does not object to Eurobonds, would be ideal for vigorous growth in the Euro, but there are still not enough votes. The most likely candidates for such an alliance are the FDP and/or Die Linke. In general, a coalition based on these parties will be favorable for the Euro.
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The worst option for the Euro will be a majority with the CDU/CSU, although Merkel will do her best to prevent a war within the Bundestag. If the SDP party is forced to "make friends" with the CDU/CSU, then the degree of positive for the Euro depends on the details of the specific coalition agreement.
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In the medium term, a strong negative for the Euro should not be expected. The chances of forming a coalition without the CDU/CSU are quite high and this is positive for all assets with the participation of the Euro. Now it is worth listening to the rhetoric of the leaders of the parties in Germany, but everything will depend on the arrangement of small parties in the government.
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Profits to y'all!