Early elections in Germany are highly unusual and call for a complicated Parliamentary procedure.
The surprise announcement is expected to have an immediate stimulating effect on the mood of corporate Germany in general and the German DAX index in particular. Fifty to one hundred points up have been predicted by Lang & Schwarz immediately after the release of the first election result forecasts.
Analysts indicate that foreign investors in the first place hope for a victory of the conservative opposition in the Bundestag and a big push for the overdue reforms of Europe's leading economy.
Mr. Schroeder's Social Democrat-led government not only lost its traditional power base on the rivers Rhine and Ruhr, but now has so few seats left in the Upper House of Parliament (representing the federal states) that its ability to actively govern is largely diminished.
The German chancellor said his programme of social reforms was already yielding results 'but for the reforms to be pursued, the majority of Germans must clearly back them now.'With five million unemployed across Germany, it is safe to predict that the general elections will focus on this vital issue.
In his uphill struggle to win back the trust of the electorate, Mr. Schroeder and his team can hardly count on encouragement from more favourable economic data. The general forecast is a meagre 0.7 % growth of the GDP in 2005 - the lowest in the European Union.
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Early German poll pleases investors
- Tuesday, May 24 - 2005 at 07:11
Following a devastating defeat in the state government elections in Germany's most populous state North-Rhine Westphalia on May 22, Chancellor German Schroeder said he wants a general election this autumn - a year earlier than constitutionally required.
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Wolfram BielensteinTuesday, May 24 - 2005 at 07:11 UAE local time (GMT+4)
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