After weeks of haggling Germany appears close to forming a new government which will see the countries main centre-left and centre-right parties join forces in a grand coalition.
The creation of a new government now depends on whether the leaders of re-elected chancellor Angela Merkel’s Christian Democrats and its opponent the Social Democrats can agree to a deal. Both sides agreed to begin formal negotiations after a third round of exploratory talks in Berlin.
The Chancellor will be hoping that a deal will be reached as uncertainty has dragged on since September’s general election where her party failed to win an outright majority in the German parliament.
Before a deal to form a coalition is made a vote has to be held by SPD members on whether to endorse joining a coalition.
Merkel is also facing pressure after she was accused of being ‘bought’ by Germany’s car industry after it was revealed that BMW donated €700,000 to her party. The substantial donation came only days before next Monday’s decision by European environment ministers to give in to German demands to scrap an agreement to cap car emissions after Berlin argued that the measure would adversely affect its car industry and lead to job losses. The suspicious timing of the donation has created a furore in the country over political party funding and donations.
Elsewhere in the Eurozone, Greece saw its current account surplus shrink in August after the nation’s trade gap expanded. The only bright spot in today’s Bank of Greece data was that spending by foreigners grew and kept the cumulative current account deficit falling.
Against the US Dollar the single currency is trading close to an 8-week high as investors favour riskier assets as expectations grow that the US Federal Reserve will choose to delay cutting its monetary easing programme until next year.
Euro (EUR) Exchange Rates
As of 11:40 am GMT
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3695
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8446
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4158
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6109
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.4084
The Euro/ Japanese Yen Rate Exchange Rate is currently in the region of: 133.7114
The Euro/Swiss Franc Exchange Rate is currently in the region of: 1.2347
The Pound Sterling/ Euro Exchange Rate is currently in the region of: 1.1837
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7302
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.7062
The New Zealand Dollar/Euro Exchange Rate is currently in the region of: 0.6206
The Canadian Dollar/Euro Exchange Rate is currently in the region of: 0.7099
Swiss Franc/Euro Exchange Rate is currently in the region of: 0.8100