I am three factors that will most affect banks European, consequently to the elections to be held in Germany at the end of the month and which at the moment appear to be still particularly uncertain. To analyze them, point by point, is an interesting report published by Swiss credit. The Swiss business house is constructive on the short-term effects on eurozone banks in terms of both fiscal and monetary policy.
Towards a German government that extends spending strings
The first, the flexibility of the politics tax. A beneficial element for European banks, which would be favored by any coalition forming the German government. With i gave, indispensable for every possible executive, which will push for an increase in public investments useful for the decarbonisation of the economy. “A probable coalition government that includes the Greens could lead Germany to adopt a more expansionary fiscal policy and also to further ease the general fiscal policy of the Eurozone,” notes Credit Suisse.
Permanent Recovery
Second, the German elections could lead to a major tax integration in the European Union, especially by making a tool like the Recovery Fund something permanent. This will lead to a reduction in risks and returns also on the peripheral countries of the Old Continent, impacting the interest margins of those banks most exposed to Central and Eastern Europe.
Temporary volatility
Lastly, i extremely uncertain polls and the ever greater possibility of one grand coalition in which there are CDU / CSU and SPD, suggest a period of volatility of the markets during what will be the prolonged period of negotiations between the parties involved.