The end of the Merkel era and the Czech economy

From the Czech point of view, it is essential that the concept of a so called two-speed Europe is postponed indefinitely. However, it also brings a series of tough questions, not only for the Czech Republic but also for Emmanuel Macron.

editor: REMIX NEWS

Angela Merkel’s era at the top of German politics is coming to an end. At the next CDU meeting, where the new party leadership will be elected, the Chancellor will nut run for the post of boss of the party.

In response to an unexpected step the euro temporarily weakened because markets are concerned about uncertainties about the further direction of the eurozone.

The markets speculate that the next Chancellor can be somehow less inclined to a policy of austerity and debt reduction. It is therefore possible that the German export machine will weaken, with a negative impact on Czech subcontracting companies.

It is also possible that the country’s next leader will put more emphasis for domestic, German production. This would lead to the relocation, for example, of a part of Škoda Auto’s automotive production to Germany.

Merkel’s decision is not potentially bad news for markets only, but also for French President Emmanuel Macron. With the weakening of her position, he must at least for the time being forsake his dreams of reform of the eurozone, including the creation of his own budget as well as the appointment of its own finance minister or the deepening of the banking union.


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