EZA 862 Report:

30 September 2008

29Sep08: Germany

Bavaria elections – black Sunday for CSU, but not Angela Merkel


The state elections on 28Sep brought a landslide defeat for the governing CSU. The sister party of Merkel’s CDU will still be able to hold on to state power together with the FDP.
For Bavaria the election outcome implies the start of a new era, but will also bring dramatic changes to the German political scene.
Paradoxically the outcome for chancellor Merkel may be positive in terms of her position in government and chances in next years federal elections.


Asset conclusions: initially market negative with respect to political stability, longer term market positive, as CDU/CSU forced to sharpen its economic profile.

© EZA