German Chancellor Olaf Scholz's SPD Beats Far-Right in Regional Election - What Does This Mean for Your Investments?
By Sarah Marsh and Riham Alkousaa
German Chancellor Olaf Scholz's Social Democrats (SPD) managed to stave off the far-right in a regional election on Sunday, providing a brief reprieve from criticism of his leadership. The SPD staged a last-minute comeback in Brandenburg, winning the election with 30.9% of the vote. The AfD, which had been leading in polls, came in second with 29.2%.
The AfD's rise is fueled by concerns over a cost-of-living crisis, immigration issues, and the war in Ukraine. Three-quarters of SPD voters cast their ballots to fend off the AfD, rather than out of conviction for the party.
Despite their victory, the SPD is facing internal debates over Scholz's leadership. Polls show the party at just 15% nationally, behind the AfD and conservatives. Suggestions have been made to field Defense Minister Boris Pistorius as a candidate in the next elections.
The poor performance of coalition partners Greens and FDP in the election adds to tensions in Berlin. FDP Vice Wolfgang Kubicki warned that the coalition must make changes or risk falling apart.
While the government is unlikely to collapse immediately, the election results highlight growing discontent with the current leadership. Investors should monitor the situation closely as political instability can impact financial markets.