Electoral carry away a campaign poster featuring German Chancellor Angela Merkel (CDU) one day after parliamentary elections, in Berlin on September 28, 2009. German Chancellor Angela Merkel clinched another four-year mandate in vote, with a score allowing her to dump her "grand coalition" with the Social Democrats (SPD) for an alliance with the pro-business Free Democrats (FDP).   AFP PHOTO   DDP / PHILIPP GUELLAND     GERMANY OUT *** Local Caption ***  905744-01-08.jpg
A poster that says "We're voting for the Chancellor" and urging electors to "Strengthen Merkel" by casting both their votes - for the candidate and the party - for her CDU party is taken away a day afShow more

Merkel pushed to turn hard Right



Berlin // Angela Merkel will face increasing pressure to drop her softly-softly style of government and mutate into an Iron Lady after winning a second term in Sunday's federal election. The German chancellor smiled coyly at the chants of "Angie! Angie!" from supporters after the results confirmed her re-election, but she knows that governing will become more difficult in the next four years and her reputation as "Mutti" of the nation may wane as she presides over unpopular economic measures that she shunned in her first term.

Sunday's vote has radically changed the political landscape in Europe's largest economy. The centre-left Social Democrats (SPD), with whom Mrs Merkel's conservatives shared power, have been banished into opposition and Mrs Merkel will be able to form a centre-Right coalition with the resurgent pro-business Free Democrat Party (FDP) which wants to roll back the state, cut taxes and deregulate markets.

Mrs Merkel's beaten challenger, Frank-Walter Steinmeier of the SPD, is expected to be succeeded as foreign minister by the FDP leader, Guido Westerwelle, who backs Mrs Merkel's foreign policy of close ties with the United States and a commitment to the military mission in Afghanistan. Mr Westerwelle will be Germany's first openly homosexual foreign minister. After four years of enforced consensus during which the two biggest parties were locked together in a "grand coalition", German politics will now shift back to old-style confrontation between the Left and Right. Mrs Merkel will have to drop her hands-off, mediating approach to government and start getting her hands dirty in the rough-and-tumble of domestic politics, commentators say.

She now has the coalition she always claimed she wanted, but it remains unclear what she will do with her new-found freedom. She ditched her agenda of business and tax reforms after the 2005 election and looked comfortable governing with the SPD, partly because it gave her an excuse for shelving controversial policies. That helped her become one of the most popular German chancellors in history. Now no one knows what she really stands for. Mrs Merkel kept her campaign pledges vague and focused on promising to get Germany out of its economic downturn. Her plans are as inscrutable as the smiles with which she reacted to her victory. But she was at pains to reassure voters yesterday that she would not start dismantling the welfare state just because she had changed her coalition partner.

"I see my task as being chancellor of all Germans," she told a news conference. "We want to make clear that we are equally interested in the welfare of all the different groups of society. I am not going to change totally just because the government has changed." Mrs Merkel said she planned to start coalition talks with the FDP as soon as possible and to have her new government in place by November 9, the 20th anniversary of the fall of the Berlin Wall. Her coalition will have 332 seats in the 622-seat lower house of parliament, the Bundestag, giving her a comfortable majority of 20 seats.

"Mrs Merkel must move fast to shed the mask of the perfect pragmatist," said Adam Jasser, the programme director at DemosEuropa, a Polish think tank. "She has become so good at concealing her beliefs that even sympathetic analysts began to say she simply had none. Now is the moment to prove them wrong and to come out with a vision that will help revitalise and modernise Germany and spur a reform drive across Europe."

The FDP was last in government under Helmut Kohl, from 1982 until 1998, and has often been kingmaker as junior partner in German coalitions. It is expected to get four cabinet posts including the economy and justice ministries. Brimming with confidence after it jumped almost five points from the last election in 2005 to score its best result in a national election - 14.6 per cent - the FDP is likely to push for tax cuts and a loosening of rules protecting workers from dismissal.

"I think deep down Merkel would have preferred to stick with the grand coalition," Dietmar Herz, a political analyst at Erfurt University, said in an interview. "Governing is going to get a lot more difficult for her than it was the Social Democrats. "There is going to be a row about what direction her government should take. The FDP wants a different economic policy and there are big elements of the conservative party that were very unhappy about Merkel's shift to the Left in her first term."

Mrs Merkel said her focus was to get Germany out of its worst economic downturn since the 1930s and to tackle the ballooning government deficit, which has surged as a result of corporate bailouts and stimulus packages to cope with the crisis. "If the chancellor continues to play the role of the nation's mummy, she will have difficulties with the FDP and her own party," wrote Süddeutsche Zeitung, a leading centre-Left newspaper. "But if she turns into an Iron Lady, she will lose her kudos and reputation among the population. Which means that Angela Merkel's golden era is over."

foreign.desk@thenational.ae

THURSDAY FIXTURES

4.15pm: Italy v Spain (Group A)
5.30pm: Egypt v Mexico (Group B)
6.45pm: UAE v Japan (Group A)
8pm: Iran v Russia (Group B)

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

How to watch Ireland v Pakistan in UAE

When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.

The specs: 2018 Nissan Altima


Price, base / as tested: Dh78,000 / Dh97,650

Engine: 2.5-litre in-line four-cylinder

Power: 182hp @ 6,000rpm

Torque: 244Nm @ 4,000rpm

Transmission: Continuously variable tranmission

Fuel consumption, combined: 7.6L / 100km

SPECS

Engine: 4-litre V8 twin-turbo
Power: 630hp
Torque: 850Nm
Transmission: 8-speed Tiptronic automatic
Price: From Dh599,000
On sale: Now

The Pope's itinerary

Sunday, February 3, 2019 - Rome to Abu Dhabi
1pm: departure by plane from Rome / Fiumicino to Abu Dhabi
10pm: arrival at Abu Dhabi Presidential Airport


Monday, February 4
12pm: welcome ceremony at the main entrance of the Presidential Palace
12.20pm: visit Abu Dhabi Crown Prince at Presidential Palace
5pm: private meeting with Muslim Council of Elders at Sheikh Zayed Grand Mosque
6.10pm: Inter-religious in the Founder's Memorial


Tuesday, February 5 - Abu Dhabi to Rome
9.15am: private visit to undisclosed cathedral
10.30am: public mass at Zayed Sports City – with a homily by Pope Francis
12.40pm: farewell at Abu Dhabi Presidential Airport
1pm: departure by plane to Rome
5pm: arrival at the Rome / Ciampino International Airport

Get Out

Director: Jordan Peele

Stars: Daniel Kaluuya, Allison Williams, Catherine Keener, Bradley Whitford

Four stars


View from London

Your weekly update from the UK and Europe

      By signing up, I agree to The National's privacy policy
      View from London