German Default Risk Spikes To Highest Since Brexit As Merkel Lead Plunges To Multi-Year Low
Germany’s Social Democrats narrowed the gap with Chancellor Angela Merkel’s bloc to the closest in more than four years, reinforcing a poll bounce after they chose outsider Martin Schulz to challenge Europe’s longest-serving leader. As Bild reports, the 6-point surge in opposition support was the biggest ever recorded for the party… and may explain why German sovereign risk spiked to its highest since Brexit.
As Bloomberg reports, support for the SPD jumped 8 percentage points to 29% from a month earlier, the highest level since the last election in September 2013, according to the Infratest-Dimap for broadcaster ARD. Merkel’s Christian Democratic-led bloc, known informally as the Union, slid 3 points to 33%. Half of those surveyed would support Schulz if the chancellor were elected directly, compared with 34% for Merkel.
The poll underscores this year’s political risks for Merkel, 62, who has previously focused on the challenge by the anti-immigration Alternative for Germany, or AfD. The unexpected candidacy by Schulz, new to German politics after leaving his post as president of the European Parliament, has opened another front while Merkel seeks a fourth term at the helm of Europe’s biggest economy in the Sept. 24 parliamentary election.
As The Independent notes, the SPD appointed Schulz, a former European Parliament president, as leader last Sunday, replacing Sigmar Gabriel who said he was standing aside to boost the party’s chances.
“Martin Schulz is managing above all to win back former SPD voters and to appeal to them emotionally,” Emnid’s Torsten Schneider-Haase told the newspaper, adding: “Such a strong shift in party preferences within a week is a one-off.”
The move has re-energised the SPD, junior partner in Merkel’s ‘grand coalition’, ahead of September’s federal election. Schulz has vowed to unseat Merkel with a campaign aimed at overcoming “deep divisions” that he says have fuelled populism in Germany in recent years.
As the chancellor grapples with U.S. President Donald Trump’s unpredictability, Europe’s biggest refugee crisis since World War II and a surge in support for anti-establishment forces ahead of elections in France and the Netherlands, the political headwinds at home add to a tumultuous political year in the region.
Which may help to explain why German sovereign risk has spiked to its highest since Brexit this last week…