German election: near-term gain, long-term pain?

The German election looks set to yield a coalition of Angela Merkel’s CDU/CSU, the FDP and the Green Party. This will mean slightly lower taxes than under the alternative of another grand coalition, which should boost growth over the next year or two. But the new government will also be less open to immigration and euro-zone integration, which will do the economy no favours further into the future.

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