What is in store for investors after the German government talks collapse?

It seems that a new government coalition in Germany is now out of reach. What are the possible options for Germany at this stage?

Tristan Perrier: There is still a possibility that a coalition will be formed, although it will take time. A Jamaica (CDU/CSU, FDP and Greens) coalition, would require the FDP party to return to the talks, while another Grand coalition (CDU/CSU and SPD) would require the SPD to drop its current refusal. A combination of public opinion pressure, additional concessions from the CDU/CSU and the will to avoid repeat elections (or even, although unlikely at this stage, A. Merkel accepting to step down as Chancellor) may lead to such developments. A minority CDU/CSU government is also an option, unprecedented in modern German history, but its stability would be very uncertain. Finally, repeat elections (also unprecedented) cannot be ruled out. However, current polls indicate that they may not yield very different results from the September ones, while mainstream parties would probably be reluctant to let them happen, as they could lead to further gains by the far-right AfD party. In the meantime, the caretaker CDU/CSU-SPD government stays in place, with no given time limit.

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