For yet another illustration of how the political landscape and betting sentiment is constantly changing fast, check out the odds for next Sunday’s German Federal Election.
Back at the beginning of 2017, with the world still in shock following Brexit and Donald Trump’s election, many believed that mainstream Europe and most dramatically Germany could also fall under the spell of the Alt-Right. Geert Wilders’ PVV were heavily odds-on to win the Dutch election, Marine Le Pen a strong second favourite in France and the AfD’s Frauke Petry trading in single figures to be the Next German Chancellor.
Even if that last earthquake was still a relative longshot, punters believed Angela Merkel was under serious pressure, trading around even money for a fourth term. One week out, she is rated almost certain at odds of just 1.05, equivalent to a 95% likelihood. Her CDU/CSU party are a 1.01 (99%) chance to win Most Seats.
Therefore to find a bet with any sort of meaningful returns, we either need to back an upset – for which there is literally no indication – or focus on speciality markets. In addition to the projected vote share of the main parties, the most interesting involves the make-up of the Next Government, which will almost certainly be a coalition.
Currently Germany is governed by a grand coalition that will feel alien to political observers in the English-speaking world. Merkel’s centre-right party share power with the centre-left SPD, led by Martin Schulz. The equivalent of a Conservative-Labour pact in the UK or Republican-Democrat in the USA. Unimaginable, right?
Yet not only has that arrangement survived the full term but it is hot favourite to carry on into the next Parliament, trading at odds of just 1.6 (63%). For my money, that is well worth opposing.