German federal elections will be held tomorrow. As polls ahead of Germany’s vote suggest a small but perceptible ebbing of support for Chancellor Angela Merkel’s Christian Democrat-led bloc and Martin Schulz’s Social Democrats, the previous election in 2013 suggests that may not be the whole story.
As Bloomberg writes in an article "Can Merkel Outdo Polls Again? Or Will Populism Make a Comeback?", Merkel outperformed the final opinion polls last time around, and it wouldn’t take too much of a late shift to clear the way for a coalition with the Free Democratic Party, her preferred partner, on Sunday -- despite gains by the populist Alternative for Germany, or AfD. The final Allensbach poll this week put Merkel’s bloc and the pro-market FDP perhaps 1 percentage point short of being able to reprise their 2009-2013 coalition. That would allow Merkel to avoid the need to add the Greens to ensure a Bundestag majority, or to continue her existing grand coalition with the Social Democrats. In 2013, all final pre-election polls underestimated the strength of Merkel’s CDU and its Bavarian sister party, the Christian Social Union, which campaign jointly in national elections. Merkel’s bloc took 41.5 percent nationwide last time, its best performance since 1990, the year Germany was reunified under CDU Chancellor Helmut Kohl.
Latest polls put the CDU and CSU on 36-37 percent, though exit-poll data from the 2013 vote suggest that voters who made up their minds at the last minute favored the incumbent.
It was a similar story in the neighboring Netherlands, where incumbent Prime Minister Mark Rutte was the beneficiary of a swing to his Liberal party in March that manifested itself right on the eve of the election.
Growing support for the AfD is evident in most surveys, most clearly in Emnid’s polling for the Bild am Sonntag newspaper. On the other end of the political spectrum, the anti-capitalist Left party has been attracting more voters as the campaign nears its climax. Three of the past six polls show the AfD and the Left taking more than 20 percent between them.
The splintering vote suggests that Germany might buck a trend that’s seen the single-track populist electoral challenges of Geert Wilders in the Netherlands and Marine Le Pen in France this year fading in the final stretch, and the U.K. Independence Party disappearing as a serious political force. If the AfD does better than polls currently suggest, that might well spark concern among investors.
“An unexpectedly strong result for the AfD above the 15 percent mark could lead to a short-term risk-off reaction in the markets,” Joerdis Hengelbrock, a portfolio manager at Sal. Oppenheim in Cologne, said in an email.
The U.K. election in May, of course, confounded most of the pollsters. Opposition leader Jeremy Corbyn had been written off, but his Labour Party beat the polls on election night and gained seats from the ruling Conservatives in the most unexpected places, depriving Prime Minister Theresa May of her parliamentary majority.
Can Schulz emulate Corbyn? “Everything is still possible,” the SPD leader told RTL television on Wednesday. “There’s enormous uncertainty. I think we’re very likely to have a last-minute swing.”
