Merkel tested, Formula One restarts
Hello and welcome to the "Week Ahead" from the Financial Times in London. Here are some of the stories we'll be watching in the coming days. Regional elections in Germany provide a litmus test for Chancellor Angela Merkel's prospects in September's parliamentary vote. The first Formula One Grand Prix takes place since US group Liberty Media took ownership of the global racing series. And euro area finance ministers meet to discuss, among other things, negotiations with the IMF over Greece's bailout programme.
First, she's widely considered the most powerful woman in the world, but can German Chancellor Angela Merkel hold onto power come elections in September? Well, next week, we should get a clearer indication of her chances, when the votes are counted in a poll in the country's Saarland region. The Chancellor's Christian Democratic Union party had generally been forecast to win by a clear margin in the region, but the Social Democrats, or SPD, have enjoyed a dramatic national resurgence since earlier in the year, when former president of the European Parliament, Martin Schulz, took over as the party's leader. The shift has left the local race wide open.
Observers are also focused on the right-wing Alternative for Germany party, which faces its first electoral test since a string of successes in regional elections last year. Speaking on the losses of a different European right-wing party last week-- in this case, the populist Geert Wilders in the Netherlands-- Ms. Merkel had this to say.
The first Formula One Grand Prix under new ownership gets underway at the weekend, as the global racing series is driven into a new era, after four decades under the direction of former F1 chief executive Bernie Ecclestone. The first race of the 2017 season will take place in Melbourne, Australia under the watchful eye of Chase Carey, the chairman and chief executive of Liberty Media, the US group that acquired F1's parent company in an $8 billion deal completed earlier this year. Mr. Carey is charged with reinventing the sport. Here's our Leisure Industries Correspondent, Murad Ahmed, on some of his long-term plans.
There are three prongs to this. One is to try and crack America. At the moment, the American Grand Prix takes place in Austin, in Texas, which is a relatively small market, but there's talk of moving to Miami and also Las Vegas. Another thing is to try and crack the digital market. At the moment, all the TV broadcasting deals and the digital deals are all bundled into one, and they're hoping to split those things out and to make more money through internet deals.
And finally, trying to make the event much more watchable for those who actually turn up themselves. They want to turn every Grand Prix into the equivalent of a Super Bowl. So there would be concerts there. There would be much more for families to go and watch, so you'd actually want to turn up to watch Grand Prix when the carnival came to town.
And finally, euro area finance ministers will gather in Brussels on Monday. The main item on ministers' agenda will be Greece and the ongoing efforts to reach a deal with the International Monetary Fund on the next stages of the country's bailout programme. EU and IMF officials have been negotiating intensely in recent days in a bid to lock down a deal on tax, pension, and labour market reforms that Athens should implement in the years after its aid programme ends in 2018.
The clock is ticking towards a deadline in July, when Greece needs to make repayments of around EUR 7 and 1/2 billion. To do that, it will need another tranche of support under the bailout plan agreed in 2015, but that won't arrive unless there's a common understanding among European finance ministers, Greece, and the IMF. But as the FT's Europe editor, Tony Barber, outlines, what that really means is an agreement between the new administration in Washington and the leading governments in Europe. And this is where he says there could be a problem.
What you're seeing is a rising impatience among Trump nominees and right-wing Republicans with the role that the IMF has played in support programmes for financially-stricken eurozone countries-- above all, Greece. In principle, the Europeans could carry on their own, supporting Greece. But of course, there is a lot of pressure domestically in countries such as Germany and the Netherlands and Finland. Now, the way they've been able to finesse that so far has been by saying, well, look, we've got the IMF on board with us, with American support. If that disappeared, you could see the pressures domestically in Germany and other northern eurozone countries rising to intolerable levels, and that would recreate the possibility of Greece tumbling out of the eurozone, with all the implications for world financial stability that that implies.
And that's what the week ahead looks like from the Financial Times in London. See you again next time.