The Social Democratic Party of Germany (SPD) has demanded new compromises on migration and health insurance from the Chancellor Angela Merkel's Conservative Bloc. On Monday, Martin Schulz, the Socialist leader in Germany, said he wanted to renegotiate some of the key elements in the coalition project to be able to appeal to the more intolerant members of the SPD. Schulz said he will hold a meeting with Merkel and Horst Seehofer, the Christian Social Union (CSU) leader who supports Merkel's leadership. Social Democrats will struggle to limit the number of migrants to 1,000, the number of people that can be accepted each month, including representatives of their families who have already been granted asylum in Germany.
Schulz said he would seek the ruling party's consent to the so-called "civilian insurances" that the SPD wants to replace the current health system. Investors worry that if Social Democrat leaders fail to make their promises, party members will reject the final deal, and Germany will be in the starting position. With such a coincidence, we expect a EUR decrease, and above all the German benchmark DAX 30.
On the other hand, Merkel stands firmly behind its priorities for preserving German economic power and guaranteeing social justice and security.
Currently, the market reaction is insecurity among investors when it comes to German stocks and a short EUR/USD range due to the inability to form a government.
Source: Reuters
Jr Trader Petar Milanov
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