Politics dominate economics to start the week

<p>Kia ora,</p><p>Welcome to Monday's Economy Watch where we follow the economic events and trends that affect New Zealand.</p><p>I'm David Chaston and this is the International edition from Interest.co.nz.</p><p>Today we lead with news politics is to the fore to start the week.</p><p>First in Germany at their <a href="https://www.spiegel.de/thema/bundestagswahl_2021/" target="_blank"><strong>elections</strong></a> to replace Angela Merkel, seven parties have reached the 5% threshold with the largest garnering only 25% of the vote. The Greens got 14% and the far-right AfD 11%. The far-left party scraped in with 5%. The king-makers will be the centerist FDP, the usual party in this position, but the Greens may make negotiating tough to achieve a government with stability. Merkel's party the CDU looks like it will be the largest party of the opposition now.</p><p>German politics are key in Europe with their economy the largest in the EU, +20% larger than France, and now almost +30% larger than a faltering UK.</p><p>Meanwhile, global investors who own Evergrande's USD bonds did not receive their US$83 mln coupon payment by the deadline last week. There is a 30 day grace period before a default event is triggered however. At stake are bonds with a face value of only US$2 bln, but it is an event sending reverberations through the US$400 bln Asian debt markets. Evergrande paper is now trading at just 28c in the dollar.</p><p>And China is <a href="https://www.scmp.com/business/companies/article/3150043/hnas-founder-chen-feng-chief-executive-adam-tan-xiaodong?module=lead_hero_story&pgtype=homepage" target="_blank"><strong>arresting</strong></a> the senior management of another failed conglomerate, HNA.</p><p>But <a href="http://www.ce.cn/xwzx/gnsz/gdxw/202109/26/t20210926_36947246.shtml" target="_blank"><strong>freed</strong></a> is the daughter of the Huawei boss, held on money laundering charges in Canada - <a href="https://vancouversun.com/news/politics/michael-kovrig-and-michael-spavor-greeted-by-trudeau-in-calgary-a