German Chancellor Angela Merkel’s CDU/CSU centre-right bloc polled almost 34 percent in the German general election Sunday 27 September while her government coalition partners, the centre-left socialist party, SPD, obtained their worst results since the Second World War, with 23.4 percent. The results allow Merkel to ditch the socialists and open talks with the business-friendly liberal party, FDP about forming a new government underpinned by a stable majority in parliament.The FDP obtained almost 15 percent of the vote, its best result ever.
Germany is in the midst of its worst economic crisis in decades, the economy is expected to contract by five percent this year, and the liberal party will want to discuss health care reform, tax cuts and a reduction of the welfare state before joining a government. CNN, NZZ, Reuters
Update 12:25. The French and German economies grew in the second quarter of 2009, raising hopes that the recession in Europe is over. Unexpectedly strong growth of 0.3 percent in the second quarter in Europe’s two largest economies appear to be due to strong demand for European exports, low interest rates and stimulus spending by governments. The good news is expected to give a boost to German Chancellor Angela Merkel’s chances for re-election in polls 27 September.
GDP growth in the Euro area was down 0.1 percent in the quarter, however, while econmic growth in the EU 27, which comprises the economies of all EU members, was down a total of 0.3% in the second quarter of 2009, according to Eurostat, the European Statistics Agency.
