Merkel Seeks Three-Way Alliance

Chancellor Angela Merkel won a fourth term in office in a German national election on Sept. 24, but a fractured vote that brings the far-right into parliament means she must try to work out a three-way coalition untested at federal level.

The new alliance would compromise Merkel’s conservative bloc – her Christian Democratic Union (CDU) and the Bavarian Christian Social Union (CSU) – along with the pro-business Free Democrats (FDP) and environmentalist Greens.

Such a three-way tie-up is called a “Jamaica” coalition in reference to the three parties’ colours: black, yellow and green, which match those of the Jamaican flag.

To secure a coalition agreement, the unlikely allies must overcome differences on a range of issues including immigration policy, Europe, tax and the environment.

Following are coalition-related remarks from senior officials:

PROSPECTS FOR A JAMAICA COALITION:

ANGELA MERKEL (CDU)

“We achieved a joint result (with the Bavarian CSU allies) which I think is a very, very good basis to go into exploratory talks with the FDP and Greens.”

“On Friday, October 20th we will have a first round of exploratory talks with all partners.”

“The parties come from very different starting positions. There will be discussions in a lot of policy areas with the FDP and the Greens.”

CEM OZDEMIR (GREENS)

“We all need to just get started now.”

“Compromises always mean everyone needs to give a bit.”

CHRISTIAN LINDNER (FDP)

“We don’t have to govern. There is also the possibility of another grand coalition (between Merkel’s conservatives and the Social Democrats).”

IMMIGRATION:

SIMONE PETER (GREENS)

“This is an agreement between the CDU and CSU and far from the result of exploratory talks for a coalition with the FDP and Greens.”

JUERGEN TRITTIN (GREENS)

“Further suspension of family reunion for subsidiary protection prevented integration efforts.”

CHRISTIAN LINDNER (FDP)

“Immigration is not the only issue where the parties have different ideas.”

WOLFGANG KUBICKI (FDP)

“I am certain that in the end the solution that the CDU/CSU has found with each other will not be the basis for common work (with us) for the next four years.”

EURO ZONE FISCAL POLICY:

SIMONE PETER (GREENS)

“Europe’s fiscal policy needs a shift away from austerity toward a common pact for tax collection and investments, which would trigger social and ecological innovations.”

CHRISTIAN LINDNER (FDP)

“A red line for us in coalition talks is the mutualization of debt in Europe, the creation of new pots of money.”

Reuters

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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell