After Merkel, Europe Eyes Looming Shift in Germany
Welcome to the Brussels Edition, Bloomberg’s daily briefing on what matters most in the heart of the European Union.
The EU is watching eagerly to see how the election in its largest economy plays out as Angela Merkel’s tenure draws to a close. Social Democrat Olaf Scholz is the favorite to become Germany’s next chancellor, but polls suggest he’ll need to form a messy three-party coalition to secure power. That would involve either a more centrist alliance with the business-friendly Free Democrats, or a shift in the opposite direction in a tie-up with the anti-capitalist Left party. The trio’s composition will have policy implications from taxes and government spending to wages and climate protection. But that outcome won’t be clear immediately after the Sept. 26 election. Scholz’s main challenger, Armin Laschet, warns that it may take until the end of the year to form a coalition, keeping the bloc on tenterhooks for months.