background image background image background image

Election updates : German political uncertainty, a Trump-inspired presidential candidate in France

Picture of Christopher Dembik
Christopher Dembik

Head of Macroeconomic Research

Summary:  My non-scientific guess is that the next German government will certainly be a coalition of the SPD, the Greens and the FDP - the so-called Traffic Light coalition. Expect long and intense negotiations in the coming weeks, or perhaps months. But the market impact of German political uncertainty will likely be marginal. In France, the winner of the Green party primaries to run for the 2022 presidential election will be announced tomorrow. Franky speaking, it does not matter much. Support for the Greens is too low to really influence the outcome of the presidential election. Investors should however start to get more familiar with a Trump-inspired candidate who gathers up to 10% of voting intentions in the first round according to recent polls. Momentum is on his side, for now.

Uncertainty prevails in Germany: According to the Federal Returning Officer website which is responsible for overseeing elections on the federal level, the center-left SPD won 25.7% of the vote, followed by the center-right CDU/CSU which garnered 24.1%, the Green Party with 14.8% of the vote and the pro-business FDP at 11.5%. These are preliminary results. But the SPD is now in position to begin negotiations to form the new government. This process could take weeks, or even months. Here are my auxiliary observations:

  • The centrist parties have gained a lot. The far-right AfD is 2 points lower and the far-left Linke 4 points lower than in the 2017 election. Both are now consigned to former East Germany. The centrist parties gather around 75% of the vote.
  • The Greens and the FDP could play as a kingmaker in the upcoming negotiations. Given the Greens’ result is a bit disappointing (the Greens reached 20% of the vote at the 2020 European election for instance), we consider that the FDP has more political leverage to influence the formation of the next government and its policy agenda, especially regarding taxation. Both could work hand in hand in the coming weeks in order to choose the best coalition partner between the SDP and the CDU/CSU. This is exactly what proposed FDP’s chairman Christian Lindner yesterday evening.
  • A new grand coalition and a minority government are unlikely. A majority of voters reject these options. We believe the next government will be a three-party coalition between the SPD, the Greens and the FDP (the so-called Traffic Light coalition) or between the CDU/CSU, the Greens and the FDP (the so-called Jamaica coalition).
  • German politicians across all political parties acknowledge there is an urgent need for more investments, especially to reach a low-carbon society. We expect the next government will create the right conditions to stimulate the green transition. A dedicated green investment fund could be created. Hopefully, the next government will also backpedal on the decision to exit nuclear power.
  • There will be no taxation hikes, in my view. This is one of the two red lines along with the debt brake drawn by the FDP. Most potential coalition partners are fine with that.
  • Investors rightly see the German election and the following negotiations as a low-risk event. We doubt it will have much impact on the bond market and the euro in the near term, for instance.

French presidential election update: Tomorrow, the name of the winner of the Green party primaries will be announced. The two remaining candidates are Yannick Jadot, a moderate environmentalists, who is pushing for a common strategy of the Left towards 2022, and Sandrine Rousseau, an economist who is often portrayed as the “woke” candidate of the election. If pragmatism prevails, Jadot should win the primaries. But this is far from certain. Frankly speaking, it does not matter much. Support for the Greens is too weak in France to really influence the political debate and the outcome of the 2022 presidential election.

Investors should however get familiar with a Trump-inspired candidate who gathers up to 10% of voting intentions in the first round according to several polls. Eric Zemmour is a xenophobic TV columnist, more radical than far-right leader Marine Le Pen and who openly defends nationalist and anti-Muslim measures. He considers France is engaged into a civilization war against Islam. He is not officially candidate yet. But it is clear he is inclined to run. Momentum is on his side, for now. Several recent polls show that 10% of voters support him, up from 7% in early September and 5% July. For the sake of comparison, he gathers more support than some of France’s most established political parties, including the Socialist Party. He is the main thorn in the foot of Le Pen at the moment. However, we don’t think he will make it to the election day. Perhaps he will be able to get the needed sponsorships to run. But a scandal can happen quickly. We think he will drop out of the race before the first round. We still expect a second round between Le Pen and President Emmanuel Macron.


The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (
Full disclaimer (
Full disclaimer (

Saxo Bank A/S (Headquarters)
Philip Heymans Alle 15

Contact Saxo

Select region


Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

This website can be accessed worldwide however the information on the website is related to Saxo Bank A/S and is not specific to any entity of Saxo Bank Group. All clients will directly engage with Saxo Bank A/S and all client agreements will be entered into with Saxo Bank A/S and thus governed by Danish Law.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.