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German coalition stabilises economy

Angela Merkel has now confirmed her coalition partners, the Social Democrats.

Now that the German coalition government is in place, we could see a greater sense of assurance surrounding the country’s economy. The DAX has frequently hit higher highs, and over the last two months has resembled one-way traffic as it has only given the merest of glances towards heading lower.

The Gfk consumer climate has hit a six-year high of 7.4, smashing the anticipated 7.1. The third quarter saw a cooling of confidence, so these economic figures and a return to the strong stance of the first and second quarters will be welcomed.

The index is now up 20.4% year-to-date; a figure dwarfing the FTSE’s 13% rise. Undoubtedly the benefits of the US quantitative easing scheme have been felt by the index, as can clearly be seen whenever fears over it rise in the markets.

Germany’s biggest problem remains on its doorstep; that being the lack of progress being made by so many of the other EU nations in turning their economies around. It is difficult to see how much further down the road to recovery the country can go without the likes of France catching up. 

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