Goldman Says Investors See Market Gains as Merkel Stays in Power
Investors expect German Chancellor Angela Merkel to retain power in an election and they will probably move money to Europe as the economy recovers, Goldman Sachs Group Inc. (GS) and Joh. Berenberg Gossler & Co. KG said.
“There’s a clear expectation that Merkel will be involved in the government in one form or another,” Philip Holzer, deputy head of Goldman Sachs in Germany, told reporters in Frankfurt today. “Merkel’s performance in the crisis was received very positively internationally. The Americans are increasingly constructive on Europe and the periphery.”
Merkel’s Christian Democrats, who lead Germany’s largest opposition party in polls ahead of the election this weekend, have made fiscal austerity a condition of rescues of indebted states amid efforts to preserve the euro. The European Central Bank has also shored up confidence in the euro area by pledging to buy sovereign bonds if states sign up to conditions.
“There was a certain standstill before the election,” Hendrik Riehmer, managing partner of Hamburg-based Berenberg, Germany’s oldest private bank, said at the joint briefing. “The expectation is that the European process will improve, especially with regard to the relationship between France and Germany.”
The prospect of economic growth in Europe next year will draw capital from North America, Riehmer said.
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