Germany - Politics
Resignation of labour minister Müntefering implies more strains in coalition government during second half of term
On 13Nov SPD labour minister and vice chancellor Franz Müntefering resigned, handing over to technocrat Olaf Scholz.
This move – albeit not entirely unexpected – is likely to signal a change in relationship of the CDU/CSU and the SPD towards a more confrontational style.
Expect more spending pressure, as both main parties try to boost their social policy credentials.
Negative impact might be contained by the quest for fiscal and economic credibility.
Asset conclusions: more headwinds for reforms and fiscal soundness; but negative impact contained by lack of political contests after Feb08.
© Graham Bishop
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