Polls Suggest Third Term for Merkel

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Sept. 13 (Bloomberg) -- Georg Grodzki, Head of Credit Research at Legal & General Invest, discusses the coming German elections and what that may mean for Europe as a whole. He speaks on Bloomberg Television’s “On The Move.” (Source: Bloomberg)

The polls suggest so.

She is the most popular politician in her party.

The most popular party in the country.

What could go wrong?

Her coalition partners may or may not center -- send her.

She will have to talk to the social democratic party who will then possibly drag their feet with respect to a grand coalition.

That could cause some friction.

What would be at stake?

What would be the bargaining chips on the table?

Would it be to do with social policy in germany or to do with eurozone policy?

I imagine the letter might have wider indications.

At the moment, the subject of the eurozone and payments and guarantees which germany has been making are not at the forefront of the debate.

The subject of social justice and fairness is if anything, far more prominent.

The social democrats want a minimum wage which is at a decent level.

They want rent control.

They want better childcare.

They are less worried about deficits.

They want a fair distribution of the relatively good performance of the economy between the middle class and the lower class and also they want not too much in a structure reform.

What would turn this from a german specific debate into something that has broader consequences for global investors?

Would it at all affect or should germany keep paying for other countries?

Only if a party which was recently formed whose main agenda item is eurozone skepticism will make it into the parliament, then suddenly you will have a debate much to the discomfort of merkel about was germany right?

When it signed these agreements in the past.

Only that kind of surprise entry of a newly formed party into the parliament could spark the kind of debate which could unsettle european bond markets.

Anything to watch over the weekend?

Bavaria is a very unique and different state.

You have plenty of regional issues there.

Everybody will be watching hawkish we -- hawkishly the afd and how the liberators will do.

Normally, they don't do too well in that state.

Anything in comparison to their performance four years ago will be extrapolated with respect to their likely performance in 10 days.

It will be seen as a precursor and forward indicator.

What is your investment strategy?

You will have to be really bearish and expect a very inconclusive outcome of the elections.

Even possibly some participation by the communist and power.

The chances are that the compression between the periphery and the bond will continue.

The chances are that are in any other news, emerging markets will hold their ground.

That would be bad -- wouldn't be bad.

Thank you for joining us.

We will stick with the german team.

This text has been automatically generated. It may not be 100% accurate.


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