Political woes in Austria unlikely to be a big deal for markets

Over the weekend, a political scandal in Austria caused a break-up of the ruling coalition and the announcement of a snap election in September. We expect government formation to be rather lengthy and cumbersome.

Highlights:

  • Over the weekend, a political scandal in Austria caused a break-up of the ruling coalition and the announcement of a snap election in September.
  • We expect government formation to be rather lengthy and cumbersome.
  • Economically, Austria is doing fine and projected to grow stronger than the euro area average, this and next year.
  • Government bond markets did not react to the Austrian political woes. 

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POLITICAL WOES IN AUSTRIA UNLIKELY TO BE A BIG DEAL FOR MARKETS

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