Rocked by defeat, could Germany’s Merkel step down before 2017 election?

After the latest blow to Angela Merkel this weekend, with her party coming in third place to an anti-immigrant party in a state election, analysts are questioning both how much longer the German chancellor’s refugee policy can stay intact and how long she can stay in power.

“(The result was) a blow to the chancellor personally and sharpens the question over whether she will lead her party into next year’s general election,” Alastair Newton, co-founder and director of Alavan Business Advisory, said in a note Sunday.

“So far, Merkel has declined to commit to standing again for the role of chancellor in next year’s general election … However, her diminishing personal popularity ratings do beg the question of whether she may choose to step to one side rather than risk a damaging internal challenge or even the CDU (Christian Democratic Union) being ejected from government under her leadership,” Newton added.

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Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.