Nick Nasad
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Merkel's CDU-CSU Bloc Crushes in Electiony, But Coalition Partner FDP Crashes

The election in Germany has gotten lots of press coverage, and the preliminary results are in.

Here are the interesting points:

  1. Angela Merkel's Christian Democratic bloc crushed it, with 41.5% of the vote, the largest vote tall for a single party since Kohl got 43.8% of the vote in 1990.
  2. The CDU-CSU were 1 vote shy in the Bundestag of having an outright majority, so they will still need a coalition government.
  3. Her recent coalition partner, the FDP (Free Democrats Party), took in 4.8%, which is below the threshold needed to be a part of the Bundestag (ouch) and so is not an option for Merkel to join up with again.
  4. The Greens did well, garnering 8.4%.
  5. And the Social Democratic Party (SPD) hauled in 25.7%.
  6. The anti-Euro party, Alternative for Germany, also did not make the cut, with 4.7%.

The choice for Merkel then is whether to team up in a "grand coalition" with the SPD or try a new coalition with the Greens. The process to form a coaltion takes between 4-6 weeks.

What the election means for those watching currency markets is that all in all, the Germans liked Merkel's steady hand and is likely a vote for "more Europe" as the FDP (a more free-market ideology) and the anti-Euro party did not get enough votes to be represented in the Bundestag.

- Nick