The Belgian Job: Germany looking for a government

After eight long weeks since the federal election, the outlook for politics in Germany seems bleaker than ever. An election that saw the rise of right-wing populism in form of the Alternative for Germany (AfD) now has resulted in a situation that once seemed reserved for countries like Italy or Belgium: with nothing more than an interim government and no prospective coalition in sight.

After the liberal FPD vacated the negotiation table late Sunday night, the idea of a three party coalition between the CDU/CSU, the Greens and said liberals is off the table for good. After four weeks of exploratory talks, which were as much an extended trust building exercise as they were contract negotiations between embattled partners, the bridges are burnt. Tales of the events are spun already.
For the FDP, their decision to not enter a coalition supposedly was a matter of principle. The Liberals are wary of the experience of their last government under Chancellor Merkel, when they were marginalized and failed to re-enter the Bundestag in subsequent elections. Even though they seemed be able to secure substantial parts of the their policy demands in the exploratory talks, they again felt that they were marginalized between Merkel’s CDU/CSU and the Greens. Strategically, they now have the chance to follow a national-liberal course that would place them well between Merkel’s conservatives and the AfD.
Unlike the Liberals, Conservatives and Greens both felt that substantial progress was made even at the last hour. As such, many of those who took part in the negotiations were stunned when the FDP walked away. With a supposedly almost finished compromise on the table, it felt like it was a move that was very much planned ahead. Even worse was the sentiment, that the FDP stopped to negotiate in good faith quite some time ago.
This leaves Germany in a precarious political situation. The only other viable coalition to have a majority in parliament is the Grand Coalition of CDU/CSU and the Social Democrats (SPD). The latter however made it clear that they will not enter a coalition with the CDU/CSU again, a stance they re-affirmed on Monday. Out of six parties elected to the Bundestag (seven when counting the Bavarian CSU separately), only Conservatives and the Greens want to govern.
Under these circumstances, Federal President Frank-Walter Steinmeier now is the key decision maker. He will have the final say on whether he appoints a minority government – possibly between Greens and Conservatives – or if he calls for a snap election. For now he is trying to get all parties to the negotiation table again, but these efforts are very likely to be futile.
It isn’t entirely unlikely that Germany is headed to an extended period of political uncertainty. A minority government is wanted by nobody and a snap election – as of polls from Monday – is unlikely to show results much different from the September vote. The picture might become a bit more clear over the next few days, as President Steinmeier is meeting with the leaders of all parties, trying to gauge the situation.
If the German people were to make the decision, the choice would be overwhelmingly clear. 65 percent of voters want a snap election, only 29 percent a minority government.

Merkel to return – but other certainties vanish in German election

The 2017 German federal election is in the books and it brought tectonic changes to a political system that has seen remarkable stability. While Chancellor Angela Merkel and her conservative CDU/CSU technically won the election and the Social Democrats (SPD), led by Martin Schulz remain the second strongest party, yesterday’s result might prove to be the ending point for the idea of the Volksparteien. The two defining parties in German post-war history, partners in a left-leaning Grand Coalition for eight of the past twelve years, had voters running away in droves. The CDU/CSU received 33 percent, a virtual all-time low. The SPD received 20.5 percent, also an all-time low. The combined total is a far cry of the past, even less than that of the 2009 election at the height of the financial crisis.

The reasons are plentiful, but above all is a feeling of misrepresentation by a large share of the German people. Public dispute over political issues under the reign of the Grand Coalition was subdued. Decisions were made within the closed circles of both parties and presented as inevitabilities. Marginalised in parliament, the opposition of the Greens and Socialist Left could not keep the left leaning government in check. Meanwhile, the right side of the political spectrum was woefully unattended.

This election will definitely change the latter. In comes the Alternative fuer Deutschland (AfD), oscillating politically somewhere between national-conservative and fully nationalist. Led by former conservatives, but very open to radical right-wing activists, the party is a classical protest party and appears to be in disarray from day one. Frauke Petry, currently Chairwoman of the party, has already declared that she will not join the AfD parliamentary group, but rather become an independent MP. Their success in the popular vote, however, is particularly damaging for Angela Merkel. 20 percent of AfD voters previously voted CDU/CSU. Most of them switched explicitly because of Merkel and her refugee policy.

All of that leaves Angela Merkel in a very precarious situation: She is lacking options to form a government. The Social Democrats only minutes after first exit poll results came in stated they would head to the opposition. That leaves her with only a single realistic option, a coalition with the Greens and the FPD. How they fit together is a complete unknown, even assuming good will among all parties.

  • The liberal FDP is just returning after being ousted in the previous election. It is decidedly pro-business and will fit with the economically conservative part of the electorate. Christian Linder, its charismatic young leader, is a serious candidate to become Minister of Finance. He would most likely increase domestic spending, but is a strong opponent of increased solidarity within the Eurozone. Other issues that the FDP will focus on are education and digitalisation.
  • The Greens had a stronger result than expected and could complicate matters on climate and environment protection, particularly given the situation of the German car industry. The Greens control a lot of the vote in the Bundesrat, the German parliament’s second chamber, which could make governing easier for the coalition.
  • Chancellor Merkel is also burdened with a Bavarian sister party, the CSU, that faces a regional election next year. The CSU lost a higher share of votes compared to the CDU and is expected to make a sharp turn to the right.

All of this will result in some very extended coalition negotiations, which will see additional delay due to an election in the state of Lower Saxony in October. A government being formed before early December would be very surprising.

For Europe and the pending Brexit negotiations, this could spell trouble. Conflict over Emmanuel Macron’s reform plans for the EU is very much on the horizon already. European integration will be a contested issue, particularly ideas of a Eurozone budget. Any hope that Germany could push the EU Commission to be more sensible towards British interests in the negotiations seemed far-fetched anyway. All political parties agree on a strategy that values the integrity of the single European market over short term financial gain through an amicable Brexit deal. Any new government is unlikely to give Brexit a high priority or even result in a policy change.

POLITICAL OVERVIEW: Only three days until election

With only three days to go until the federal election, only one thing is absolutely clear: Angela Merkel will be the German Chancellor for four more years. With whom she will coalesce is less of a sure thing.

Virtually all polls have the CDU/CSU at 36 or 37 percent with the SPD sitting at 22 to 23 percent in all polls. The Greens havre for months been stable at about 8 percent, while the three other small parties fluctuate somewhat between 9 to 11 percent. Prior election results have often pegged the AfD too low and the Greens too high, for what its worth.

Politically, there is no big last push anyone could make. Martin Schulz and the SPD in recent days tried to use the situation of elderly care labour, which is in a very precarious situation, to attack Merkel. In her typical fashion, she just took on the issue head first, announcing that any government under her lead would deal with the situation of elderly care workers right after the election.

Whatever the outcome, we are bound to see very contested coalition negotiations. And, for the first time in many years, right-wing extremists in our Federal Parliament.