Schroeder victory hits German stocks (HOLD MEIN BIER ALERT)

BBC News ^ | September 23, 2002 | BBC News

[MadIvan]

Germany's stock market has tumbled following the election victory of Chancellor Gerhard Schroeder's Red-Green coalition.

Oh let's see, elect a government that is hostile to business, and what do you expect? The German electorate is being punished with a death by a thousand cuts, erm, stocks falling. ;) - Ivan

The Dax index of leading German shares fell 102 points to 2,963 by 1000 GMT.

Other major European markets rose.

Mr Schroeder's coalition's narrow victory depressed stock traders who have seen shares fall to their lowest levels in five years.

"This is an uncomfortable position for the stock market," said Johannes Reich, chief analyst at German private bank Bankhaus Metzler.

The result could also spell bad news for the euro.

Tee hee! Which makes it that much easier for us in the UK to avoid! - Ivan

"An inconclusive result is certainly the worst imaginable result for the euro," said Dorothea Huttanus, a foreign exchange analyst at DZ Bank.

Reform backlog

With all hopes of a Conservative-Liberal coalition delivering dramatic reforms, traders were concerned that a weak chancellor would find it hard to push through economic reforms.

Better a weak Red chancellor than one who'd force you to sing the Internationale. - Ivan

"It would have been better if one party had received a clear electoral mandate," said DekaBank economist Andreas Scheuerle.

"The reform backlog will continue."

Unemployment in Germany, Europe's largest economy, remains stubbornly high at around 10% and recession fears are strong.

"If we are looking for change in Europe, and change in Germany in particular, this result is disappointing," said CSFB chief European economist Julian Callow.

Weak investment

The election campaign did much to alienate foreign investors, analysts said.

"Not only have Schroeder's government failed to carry out the necessary reforms, they behaved like a bull in a china shop in the most recent dispute with the US government," said BDI industry association chief, Michael Rogowski.

Mr Rogowski referred to Justice Minister Herta Daeubler-Gmelin's comparison of the policies of President George W Bush and Adolf Hitler.

"That will have an impact on the economy," Mr Rogowski said.

In addition, many investors would shy away from Germany, said Fred Irwin, vice-president for corporate clients at Citibank and president of the American Chamber of Commerce.

"Without [economic] reforms it will be more difficult to convince our companies to invest in Germany," he said.

Schroeder's commitment to postpone 7bn euros (£4.43bn; $6.89bn) in tax cuts to pay for recent flood damage would also burden economic growth because consumer spending would be held back, insisted the country's leading retailer, Metro.

[MadIvan]

Truly, "Hold Mein Bier" time. Germany just destroyed themselves.

Regards, Ivan

[MadIvan]

Bump!

[Diogenesis]

Still, they have their businesses with Saddam.

The Germans have decided they are with the Axis of Evil.

Many will not forget this.

[ch.man]

I fully agree with you. Now the little problem is: it probably will impact the economy of other countries, and these countries did not have a chance to vote.

[uncbob]

Ain't our NATO allies just great

Good thing Clinton saved NATO by bombing Belgrade

[MadIvan]

I fully agree with you. Now the little problem is: it probably will impact the economy of other countries, and these countries did not have a chance to vote.

As your country consistently shows, countries which adopt the right policies can "roll with the punches" and adapt to things like Germany destroying themselves. It's going to be all right - Japan destroying themselves was not the end of the world. Germany's demise won't be either.

Regards, Ivan

[gr8eman]

Also what is exacerbatin' now and before is the fact that almost ALL prices went up the day the Euro went into effect! Most Germans can barely afford their rent and cars. So much for Socialist Utopia!

[agitator]

ping

[snopercod]

I see that Germany has their Wassermelonen, just like America does. Red on the inside, and green on the outside.

[MadIvan]

Here's Joschka Fischer, leader of the Greens:

I think he looks like an evil waxworks dummy in this, don't you?

Regards, Ivan

[aristeides]

With the Greens' strong showing in yesterday's election, is Schroeder's coalition now going to move to the left?

[MadIvan]

With the Greens' strong showing in yesterday's election, is Schroeder's coalition now going to move to the left?

Schroeder will be more dependent on them. Which means we can expect Germany to try and generate more power through things like solar and wind. And after the lights go out in Germany, we can all laugh.

Regards, Ivan

[snopercod]

Yes, not very photogenic.

As much as I hate the winner-take-all two-party system here in the States, it could be worse.

[MadIvan]

Proportional representation is a crock. What it does is make minor parties far more important than they should be. I'll bet in some constituencies in America, like San Francisco perhaps, that the Greens score 8% or better - but because of the "winner take all" system, they are isolated as the fringe minority they are. In a system with proportional representation, they get to dictate the terms by which a government is formed.

Regards, Ivan

[snopercod]

Germany just destroyed themselves.

This is certainly one more nail in their coffin. But I think their biggest mistake was when the West agreed to merge East-Germany into their country. "Blood and Soil" trumped good sense, I think.

That they accepted the worthless East-German Mark on a one-for-one basis with the ReichsMark was stunning for a country formerly known for ficsal conservatism.

[The_Victor]

I think he looks like an evil waxworks dummy in this, don't you?

Looks like a leprechaun to me.

How apropos.

[albee]

"...I think he looks like an evil waxworks dummy in this, don't you? "

More like an ugly Madeline Albright!

[tet68]

I think he looks like an evil waxworks dummy in this, don't you?

The resemblence to Ms.Hibner-Doofus is striking.
Same blotchy pale skin, pinched pained expression.

[MadIvan]

Is that his real face??? C'mon, no way!

That's his real face. Odd, isn't it? Only Michael Jackson looks more "waxy".

Regards, Ivan