Macron Victory Could Cause Headache For Merkel

Emmanuel Macron’s ascent to the French presidency is stoking an election-year fight over the euro in Germany, as the Social Democrats tell Chancellor Angela Merkel his resounding victory is the signal for her to dump fiscal austerity in Europe.

Trailing in the polls, the SPD is trying to turn Macron’s victory into a campaign weapon to energize its pro-European base behind Martin Schulz, the former European Parliament president who’s challenging Merkel in the Sept. 24 election. It’s the revival of a push by the Social Democrats, Merkel’s junior coalition partner, and allies who say the balanced-budget policies championed by Finance Minister Wolfgang Schaeuble are bad for Europe.

“Macron doesn’t want Germany’s money, he wants its solidarity,” Marcel Fratzscher, head of the DIW economic institute in Berlin, said by email. “Germany finally needs to accept more responsibility for Europe. The government’s rejectionist stance will lead to another crisis if the necessary European reforms aren’t finally addressed.”

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
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 Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. 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.