German Chancellor Angela Merkel may agree to a centralized European bank resolution system if she allies with the Social Democratic Party for her third-term government, Clemens Fuest, head of the ZEW economic research institute, said in an interview.
A so-called grand coalition of Merkel’s Christian Democrats and the SPD, Germany’s two biggest factions, “is likely not to stand in the way of a European resolution authority,” the head of the Mannheim-based institute said by phone. At the same time, Germany probably wouldn’t give up on its demand for disclosure of banks’ legacy assets as a prerequisite, he said.
If the two parties govern jointly, they would probably also ease the terms of aid loans made to Greece (GKGNGDPY) to stem the euro-area debt crisis by extending maturities and lowering interest rates, Fuest said.
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