HomeWho are weWhat we doServicesContact us

Stephen Pope is the founder and Managing
Partner of spotlightideas.

He has worked in the international capital...

In addition to the articles and research notes
that appear on this site spotlightideas is
available for commission work where unique,
sole ownership analysis will be prepared...

There is no formulaic approach to
evaluating an opportunity or situation. The
concept behind macro ideas is “What if?”
Global/Regional/national situations...

Comments to "Parkiet" Financial Newspaper / "Rzeczpospolita"

Thursday April 25th 2013

Can the pressure form AfD influence the policies of Angela Merkel coalition and the next government, which probably will be made of the same parties?
It would be wrong to draw a straight between the anti-austerity parties of Greece, “Syriza” or the Italian “Five Star” movements. However, given that both the Greek and Italian groupings have taken a profound share of the vote at the last elections Syria 26.89% June 2012 and Five Star 25.5% February 2013 it is clear that the anti-austerity voice is getting louder.

However, a subtle difference is that the elections where anti-austerity has gained a huge amount of support has todate come from the periphery/high debt nations. Of course Italy is a more sophisticated economy than Greece but it has still felt the pressure of cutbacks in the chase for fiscal responsibility.

The way in which Germany views the Eurozone is from the other end of the telescope. It is the leading economy and chief financial benefactor. It has benefitted from an exchange for the Euro that suited Germany but the standard of living that Germany enjoys was not gifted to it. It came through sacrifice and labour market reform under “Agenda 2010”.

Does it imply, that Germans are changing their attitude towards the Eurozone?
But…there comes a time when many people start to believe enough is enough and question why Germany should have to keep dipping into its pocket to facilitate ever more capital transfers, especially when the second economy, France is showing such a lax attitude toward fiscal discipline.

The thought of yet more Euro’s flying south  is reason enough for Germany's new, anti-euro political party; Alternative für Deutschland (AfD) to claim  the 5% minimum share of the national vote required to enter the German Bundestag. (A week ago it was on 3%)

But that is if elections were held now, if a week is a long time in politics then certainly 5 months is and much could change by September. In my view the change will only be to the benefit of AfD.

Let’s not forget that AfD was only officially founded on Sunday, April 14th, and hasn't even fully registered for the September elections yet. The poll shows how much appeal the anti-euro stance has in Germany right now.

It is not just a one off poll that is indicating AfD have a felt a boost.  

The recent poll by Infratest Dimap (mandated by German weekly Welt am Sonntag) dated April 7th showed that  24% of the respondents indicated that theycould imagine voting for the AfD in the federal elections.
7% of respondents answered "Yes, for sure". 17% of respondents answered "Yes, perhaps".

These votes came in the composition of  CDU/CSU voters 19%; SPD: 21%; Greens: 14%; Left Party: 29%; FDP: n/a; undecided/non-voters: 31%

It doesn't stop there as in another poll by Forschungsgruppe Wahlen (mandated by ZDF Politbarometer) dated April 12th had 17% of respondents stated they would vote for a party at the federal elections that favoured an EMU exit.
Votes co
ming from CDU/CSU voters: 11%; SPD: 18%; Greens: 8%; Left Party
: 20%; FDP: n/a; undecided/non-voters: 26%).
Again one must not get too excited by these poll projections as the Pirate movement was well above 30% in similar polls when they peaked in the public’s perception. One has to think that AdF will crack the 5% mark but not be higher than 12%.

What is the role of Germany in keeping the Eurozone together?
I am a Euro Sceptic…I just fail to see how the financial architecture can be so badly twisted and manipulated so that nations that should never have been allowed in the Eurozone in the first place are kept in. But, that is me with my raw economist hat on.
One has to become a political animal and recognise that a huge amount of capital and time has been spent on this project and the level of determination to keep the fabric of 17 from fraying; even the case of miniscule Cyprus is a force to be reckoned with.
The role of Germany is that it is the nation that everyone connected to the Eurozone has to look to:
Jose Manuel Barroso may be President of the European Commission and Herman van Rompuy  might be President of the European Union, but they are lightweights next to Chancellor Merkel. Even President Mario Draghi of the ECB is all too aware that his charter is limited as it is born from the DNA of the Bundesbank.
Citizens in the periphery may burn the Black/Red/Gold of Germany or paint a toothbrush moustache on a picture of Mrs Merkel but they do so at their own peril. If Germany one day realises the electorate will not stand for their hard earned cash flying south and getting nothing back but hatred then the periphery may find they have visited the well of economic indulgence for the last time.
This feeds into your next question…
I wonder, whether the rise of this new movement is in any way significant for Eurozone?
So far it just economic hacks like myself or academics that have put the issue of the benefits and costs of EMU under a microscope. In the real world the debate has been soft peddled as has generally been muted due to the pro- European consensus in parliament and among the labour unions, business associations, welfare groups.

In 2009/10 when Greece first had the need for financial assistance the sentiment in Germany was that  the rescue measures were “…without alternative…” (German government).

However, after Greece has been back to well several times and the bailout plate has been passed around by Cyprus, Ireland, Portugal and Spain the rumblings are growing, and they are getting louder…it may not be a shout from the rooftop but the grumble is no longer a whisper.

If the crisis in the Eurozone is not resolved soon my perspective is that Afd will become a growing thorn in the side of the political debate…who knows they may even transform their embryonic momentum into a more perpetual force that has ramifications beyond September 2013.


Latest Articles

Latest Research | List all

Renminbi Assets Anyone? Better Start Out Slowly. | 25-01-18
...Read more
Beware Another Debt Crisis, This Time From The East | 19-01-18
...Read more
For Fx Explained | 15-01-18
...Read more

Broadcast Media | List all

Naked Short Club | 13-11-17
...Read more
Stephen Pope at University of Warwick | 30-10-17
...Read more
A Discussion about Oil, Gold and Coffee | 12-10-17
...Read more

In The Press | List all

For Fx Explained | 26-02-18
...Read more
For Fx Explained | 12-02-18
...Read more
For Fx Explained | 05-02-18
...Read more

Articles Archive