CDU's Leadership Election May Affect EUR

First of all, wish you great success, good health, and lasting prosperity throughout the new year.

There are many elections going to take place in 2021, including the Dutch general election in March, the Scottish Parliament Election in May, the German federal election in September, and the Japanese general election in October. Among them, the German election will definitely affect the euro's trends.

The German general election, which was scheduled for October 24, is now decided to be held a month earlier on September 26. But before the election, all eyes could turn to the Party Congress of the Christian Democratic Union (CDU) in mid-January (probably on the 15th). The ruling party, which is led by Chancellor Angela Merkel, will elect Merkel's heir for the September election.

German polls indicate that the three leadership candidates, whoever wins the CDU race, will find it hard to win the chancellor. Chances are the CDU will be defeated in the general election, which can be traced back to the party's poor performance in local elections in recent years. The main reason is Merkel's failure in striking a balance between the interests of Eurosceptic parties and Europhile parties, which has led to a lot of grievances among the public. Therefore, it is believed the next CDU leader will adopt a tougher line in diplomacy to pander to voters.

Besides Germany, several European countries have seen the rise of their left-leaning parties. These parties, which advocate extreme populism with great efforts, are political time bombs for Europe. Both the bloc and its currency will suffer from losses if German parties, whether in power or in opposition, pitch for votes by throwing down their left-wing populist platforms.