Could we see Euro weakness due to problematic collation talks?
Angela Merkel is due to meet Social Democrat Party (SPD) leader Martin Schulz for a second day of exploratory talks on Monday. This will be done in an attempt to end current political deadlock and secure another term as Chancellor. EU policy is set to be discussed and negotiations are not set to be straight forward.
The SPD would like a future Berlin government to be similar to French president, Emmanuel Macron back the implementation of a Eurozone budget and finance minster. This is however controversial and could create problems.
The negotiations opened again yesterday more than three months after Merkel failed to form the so called Jamaica coalition between there CDU/CSU, the Free democrats and the Green Party. It has been a long period of political uncertainty and there has been calls for Merkel to step down. Her position in her party has weakened considerably following their worst defeat since 1949.
If the talks fail, Merkel has only two options, either a minority government or new elections. she has ruled out the first option and has said she would run again for chancellor which would create an even longer term of uncertainty.
If the coalition talks do prove to be problematic this could cause euro weakness and it could be a small window of opportunity for Euro buyers.
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