Macron Victory Could Cause Headache For Merkel

May 10, 2017 Share Print 0

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

Senior Market Analyst, UK & EMEA at OANDA

Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.