FRANKFURT, GERMANY (SEPTEMBER 25, 2017) (REUTERS) – The Euro slipped 0.4 per cent in early trading on Monday (September 25) after Germany’s election showed surging support for a far-right party that left Chancellor Angela Merkel scrambling to form a governing coalition.
Merkel did win a fourth term in office on Sunday (September 24) but will have to build an uneasy coalition to form a government after her conservatives hemorrhaged support in the face of a surge by the far-right.
“There has never been a Jamaica before on a federal level. It is a very difficult alliance,” market analyst Robert Halver of Baader Bank said.
A ‘Jamaica coalition’ of the conservatives, Free Democrats (FDP) and Greens refers to the black, yellow and green colours of the Jamaican flag that match the parties’ colours.
Despite winning the most votes, Merkel’s bloc slumped to its worst result since 1949 and her current Social Democrat coalition partners said they would go into opposition after slumping to 20.7 percent in projections, a post-war low.
“With the AfD, Germany is moving into the reality of other European countries which also have populist parties in their parliaments. It is very important, even though it will be difficult, that the new government can create an economic vision with jobs, social security. Enough vision that the electorate goes back to voting the established parties in four years,” Halver said.