Economists unfazed by advancing AfD in Germany | Business| Economy and finance news from a German perspective | DW | 14.03.2016
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Economists unfazed by advancing AfD in Germany

The huge success of Germany's populist right-of-center AfD may have shocked the political establishment in the country. But economists say the party's advance in state elections poses no threat to foreign investment.

The anti-immigration Alternative for Germany (AfD) on Sunday secured its entry in three state parliaments, garnering double-digit percentage results. In the eastern German state of Saxony-Anhalt, it managed to grab a staggering 21.5 percent of the vote as people's disenchantment with German Chancellor Angela Merkel's handling of the refugee influx grew.

The rapid rise of the AfD at regional level is a thorn in the side of the mainstream parties in Germany, but appears to be less of a concern for business leaders and economists.

The president of Germany business association for small and medium-sized companies, Mario Ohoven, called the successes of the populist party "a wake-up call for the German government."

"But I don't expect the election results to have a negative impact on Germany as a business location," Ohoven told Reuters.

Long-term outlook matters

"We are worried about a possible Brexit, and we have to keep an eye on Le Pen in France," said Berenberg Bank Chief Economist Holger Schmieding. "Also, the US presidential election may eventually cause a rise in protectionism - those are the things we're concerned about; political risks in Germany are not really high on our agenda right now."

"I don't believe the rise of the AfD is going to put off foreign investors," said Nordea's Holger Sandte. "Looking at the big picture, Germany is still one of the most stable and reliable European countries."

"Everywhere in Europe, so-called protest parties have been on the rise, meaning that the successes of the AfD cannot really have come as a big surprise to investors," argued Commerzbank Chief Economist Jörg Krämer.

And Lars Edler from Sal. Oppenheim added investors tended to make long-term decisions, trying to anticipate developments over the next decade or so. "That's why I don't believe the current rise of the AfD will have any effect on investors' strategies vis-à-vis Germany.

hg/nz (Reuters, dpa)

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