German markets slump as Merkel’s migration crisis hits country’s biggest firms
GERMAN shares have slumped for a second day as the crisis over migration threatening to collapse the Angela Merkel government wipes millions from top firms including Adidas and Siemens.
By DAVID DAWKINS
Express.co.uk
Mon, Jun 18, 2018
Germany’s DAX index declined 0.8 percent, weighed down by worries a crisis over migration policy could destabilise Chancellor Angela Merkel’s three-month-old coalition government. One senior EU official warned they cannot “solve” Germany’s “domestic issues”.
The biggest losers on the German index were software maker SAP, industrial group Siemens and sportswear brand Adidas, all down between 1 and 1.9 percent.
Connor Campbell of SpreadEx says the Eurozone’s struggles are now becoming “even more pronounced”.
He said: “With political tensions in Germany rising over an argument about migration, the DAX dropped another 85 points, forcing the index back below 12950, further undoing the post-ECB growth managed last Thursday.”
Other European indexes have followed Germany south.
Mr Campbell added: “The CAC was similarly miserable, shedding 0.8 percent to fall away from 5500, while the IBEX and FTSE MIB slipped 0.3 percent and 0.5 percent respectively.”
German markets could yet face more misery with no end in sight for a crisis that runs to the heart of Germany’s governance.
Chancellor Merkel is in direct conflict with sister party, the CSU from the Bavarian region, who are against Mrs Merkel’s stance on migration.
The CSU wants German police to prevent refugees entering Germany, however, Mrs Merkel blocked their plans, marking the start of a damaging fight with interior minister and chairman of the CSU, Horst Seehofer.
Markets are concerned over the power struggle between Mrs Merkel’s party (CDU) and the CSU, which have long been key allies at the heart of German power.
Holger Schmieding, chief economist at Berenberg Bank, said: “This is definitely the worst crisis she has faced in her 13 years as German chancellor.”
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