Global Insight

September 25, 2013 5:48 pm

Merkel wins the battle but Germany shifts to the left

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FDP and AfD, both to the right, did not win any seats

Like two great armies licking their wounds after a bloody medieval battle, Germany’s mighty Christian Democrats and their eternal Social Democrat challengers find they may well have to sign a peace treaty before they have even buried their dead.

Angela Merkel, the clear victor, wants a stable government to deal with the lingering eurozone crisis, fear of another global slowdown, and deep social and demographic challenges at home. The chancellor may have won the battle, but her CDU (plus the Bavarian CSU) is five seats short of an absolute majority.

She has no natural conservative ally, since the liberal Free Democrats, her present partners, fled the battlefield without a single seat. She has to find a majority with her erstwhile opponents, either the SPD or the Greens.

It is a painful prospect for all of them, and no surprise that wounded Social Democrats are unhappy about doing any deal. Some reject a “grand coalition” out of hand. Others want to put any agreement to a full-party plebiscite.

Quite apart from the negotiations taking many weeks – it took 65 days to produce a similar coalition in 2005 – a referendum might produce a truculent rejection by the rank-and-file.

The loyal footsoldiers of the SPD, especially on the left, do not want to throw in their lot with the victor and give up all their cherished social policies. Not least, they want a statutory minimum wage, and tax rises on the rich to finance more spending.

It is not a very comfortable prospect for Ms Merkel, either. The chancellor knows she will have to make some real compromises. Policies and jobs are the bread and butter of coalition talks. With the SPD, that means taking on leftwing policies – even tax rises – that might infuriate her conservative supporters.

On the other hand, she is in the pleasant position of being able to choose her future partners. If the SPD goes off in a huff, or asks for too much, she can threaten to do a deal with the environmentalist Greens.

So what can Germany’s partners learn from what seemed to be such a clear-cut election result?

For a start, the disappearance of the FDP from the Bundestag will make a difference. The party has been a pale shadow these past four years, divided on Europe, vacillating between playing poodle to Ms Merkel and sniping at government policy. But it has always been a champion of less government and more market-oriented policies. All the parties left in the Bundestag, including Ms Merkel’s Christian Democrats, are instinctive regulators.

That is true of financial regulation, and measures such as a financial transaction tax, which is common ground for the CDU/CSU, the SPD and the Greens. The FTT may never get off the ground in Europe, but it will not be for want of trying in Berlin.

Second, the centre of gravity of the new Bundestag is just to the left of centre, although more than half the national vote went to the right. The FDP and the eurosceptic Alternative für Deutschland, both on the right, fell just below the 5 per cent needed to win seats.

The far-left Linke party will hold the balance of power. Indeed, if the SPD joins the CDU in a grand coalition, the Linke will lead the opposition. They have one more vote than the Greens. But no one wants to form a government with them because they are anti-Nato and often anti-EU.

One thing is certain: the next German coalition will be more pro-European than the last. FDP doubts about eurozone bailouts were always a worry for Ms Merkel. The Greens are Germany’s most pro-European party, followed by the SPD.

A grand “black-red” coalition is still the most likely outcome, but Ms Merkel can flirt with the Greens, too. It is their chance to be the new kingmakers of German politics. They might lose some leftwing supporters from the old “fundamentalist” wing of ex-1968 revolutionaries, but “realist” Greens and Ms Merkel’s “pragmatist” Christian Democrats could yet make a workable combination.

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