Merkel wins strong mandate to stick to her guns

While Angela Merkel did not win enough votes to govern alone in yesterday’s election, her strong support was a clear vindication of her domestic and international policy stance so far. She is likely to end up governing as part of a grand coalition with the Social Democrats, but we expect no major policy changes. Germany will continue to advocate austerity at home and in the region’s periphery and make only slow and small steps towards fiscal union.