Germany

Germany in crisis gets a government of last resort

BY Leo Traugott   /  9 February 2018

Germany’s general election in September 2017 had been a vote for political change. While Conservatives and Social Democrats together lost 13.8 percent, the far-right Alternative fuer Deutschland (AfD) leaped into parliament, and the Free Democrats (FDP) returned from their stint in the extra-parliamentary opposition.

On election night, Martin Schulz, leader of the Social Democrats, openly admitted that his party’s governing ‘Grand Coalition’ with Angela Merkel’s Conservatives “has been voted out of power.” The SPD would now follow the will of the electorate, he announced, which had “tasked us to go into opposition.”

Four months later, it seems like the election never happened. On Wednesday, Germany moved a step closer to a new government: Merkel’s Conservative bloc of Christian Democrats (CDU) and Christian Social Union (CSU) agreed a coalition agreement with Schulz’ SPD. The ‘Grand Coalition’ is dead, long live the ‘Grand Coalition’!

No one really seems happy.

The worst mood can, without any doubt, be found within the SPD. Looking at the outcome of negotiations, one might be forgiven to expect the Social Democrats to be content. The party received enough important ministries to prompt Germany’s biggest newspaper to splash that “Merkel handed over government to the Social Democrats.” Among its six departments, the SPD received the prestigious Foreign Ministry, controls spending with the Finance Ministry, and occupies its core area of competence, the Ministry for Labour. It punches far above its electoral results.

Nevertheless, the party is in open rebellion. Schulz had already been under severe criticism for breaking his promise not to join Merkel in government. When he reached for the foreign ministry, his internal competitor and current SPD foreign minister Sigmar Gabriel lashed out against him in the media, ultimately forcing Schulz’ final resignation. Two days earlier, under pressure, Schulz had already resigned from the post of party chairman – and party members also revolted against the successor he proposed.

At its latest party conference in January, a stunning 44 percent of SPD delegates voted against another coalition with the Conservatives. And while the party leadership went ahead regardless, the campaign to bring down the coalition has intensified. The coalition agreement has to be approved by all 460,000 SPD members, with votes counted on 4 March – until then the fight within the party will continue.

In the conservative camp, the mood is better, but also far from enthusiastic. Many within the CDU are shocked at how much ground has been given to the SPD in order to close the deal. The only big ministries for the CDU are defence and economy. Voices from the party’s business wing warn that the agreed policies jeopardise Germany’s economic future, while others call the coalition agreement unacceptable.

Meanwhile, doubts over Merkel’s future are becoming louder. As her power wanes, eyes are locked on who and what comes after her 12-year reign (16 years if she survives this whole term). Will the CDU maintain the centrist course steered by Merkel, or will it move further to the political right again? The leader of the party’s youth wing, Paul Zimiack, warned that if there was no gradual movement towards internal renewal, “the mood will remain very, very bad.” Several state branches of her party have signalled the same.

There are generally two arguments made in favour of this coalition. First, that it provides Germany with stability in a period of global turmoil; second, that it is good and necessary for Europe. Both accounts are right, but come with caveats.

Sure, an experienced majority government provides stability. More so than new elections or the (in Germany) untested alternative of a minority government. It preserves the status quo.

Yet, the reward of stability often comes at the price of progress. The new coalition does little to solve the structural issues threatening Germany’s long-term stability. While the coalition agreement contains good ideas, they are not nearly enough (or sufficiently credible) to assume that this government will successfully tackle key issues, such as Germany’s demographic crisis or the lack of a digital economy.

The same is true for the argument on Europe. While the coalition agreement is as pro-European as they get in Berlin – it proposes higher German contributions to the EU budget, a shared European framework for minimum wages, a joint EU initiative on corporate taxation and more – it remains rather vague on the details or the plans to get there.

Martin Schulz, the key driver behind the agreement’s pro-European approach, is gone. Criticism towards parts of the new government’s EU agenda is widespread within the ranks of CDU and CSU. And while Berlin and Paris can achieve much if they cooperate, there remain many other European countries to be convinced. It remains to be seen how much of this government’s EU plans will ultimately be implemented.

You should not expect too much from Germany over the next four years. While its political landscape is increasingly changing, its government is not – at least for now. Or, to put it in the words of Theresa May: Nothing has changed, nothing has changed…

Leopold Traugott is a policy analyst at Open Europe