The German elections are not boring. They are troubling.

By Wolfgang Münchau

For all those of you who think the German elections are boring, consider the following anecdote. Alexander Gauland, one of the two AfD leaders in this week’s election has effectively issued a death threat to a German minister, Aydan Özoguz. He said he wanted to “dispose of her” in Anatolia. Ms Özoguz is a German citizen whose parents immigrated from Turkey. She is the German government’s chief official responsible for integration.

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QE’s graceful exit

QE’s graceful exit

The ECB is expected to discuss this Thursday the future of its asset purchase programmes beyond the end of 2017. But exiting QE is no easy matter. The Fed’s policy normalisation plan has been three years in the making, with an update only last June, but the plan hasn’t been executed yet. The reason is the concern about the market impact of stopping or unwinding asset purchases. Just like bond yields have collapsed to negative values as a result of QE, they could rise uncontrollably when QE ends. And, in the case of the eurozone, the borrowing costs of peripheral member states might shoot up like they did at the height of the government debt crisis five years ago. I argue that a graceful exit from QE would be possible if central banks chose to act as market-makers, but they won’t for ideological reasons, and that the ECB actually can’t, for legal reasons.

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