Angela Merkel Facing Challenging Political Landscape in Election Aftermath

Investing.com - German Chancellor Angela Merkel is often portrayed as the west’s bastion of liberal values in a world roiled by Donald Trump and Brexit.But Sunday’s election results have shown how much her domestic support has diminished, with large numbers of voters deserting her party for the far right. Alternative for Germany, a rightwing populist party surged in popularity, becoming the third largest group in parliament.Merkel now faces months of coalition talks to try to form a stable government, leaving investors worried that political uncertainty could act as a drag on the Germany economy and make closer euro zone integration more difficult.The election results could limit the scope for German co-operation with France on a major reform of the euro zone.French President Emmanuel Macron has proposed shoring up the euro zone’s resistance to another crisis with a finance minister, budget and parliament, but this would need backing from Berlin.Uncertainty after the German election sent the euro to its lowest level for a month on Wednesday.