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Germany, or even Europe, to be thrown into political turmoil?

Germany, or even Europe, to be thrown into political turmoil?

15-02-2018 | Column

Euroscepticism was put to the electoral test last year, and apparently it failed

  • Léon  Cornelissen
    Léon
    Cornelissen
    Chief Economist

In the Netherlands, the moderates hold on to power. Then came the election of French President Emmanuel Macron and the decisive victory of his newly founded movement, La République en Marche, in the French general elections. Finally, in Germany, the position of Chancellor Angela Merkel was weakened, but most likely not fatally so, as an interesting fresh ‘Jamaican’ coalition experiment was feasible. Otherwise, it would be a continuation of the Grand Coalition (GroKo), or even a Christian Democratic minority cabinet. German political stability seemed assured under all scenarios, with Merkel entering a final term.

Four months later, a coalition agreement has been hammered out to continue the earlier Grand Coalition. The only hurdle is that the individual members of the social democratic SPD need to approve it in a postal vote in the coming three weeks. Many observers take an ‘aye’ for granted, because as the Berlin-based magazine Cicero remarked, the social democrats do not have enough of a ‘death wish’ [Todessehnsucht] to reject it. In the polls, support for the far-right populist AfD (Alternative für Deutschland) has recently gradually risen to 15%, just 2% behind the SPD’s 17%; in the September 2017 elections, the SPD's vote share of 20.5% was already its worst result since the Second World War. New elections could turn out to be especially devastating for the social democrats.

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Clever move

In a clever move, Chancellor Merkel has been very generous to the social democrats, and given them an offer they can’t refuse. Although the CDU had a much stronger result than the SPD in the 2017 poll, both parties would get the same number of ministers, and the SPD would get particularly important posts like Finance – which would go to the popular mayor of Hamburg, Olaf ‘Scholz-o-mat’ Scholz – and Foreign Affairs. For the latter role, the unpopular leader of the SPD, Martin Schulz, was in the frame, while at the same time giving up his SPD party leadership. But in the meantime, he has given up both ambitions, and will leave German politics. This is an additional argument for members of the SPD to vote to accept Merkel’s tactical generosity, right? Not so fast.

Firstly, it could be argued that a continuation of the GroKo is exactly an outcome that the German voter voted against. Moreover, the loyalty of the SPD to Merkel in the last government had meant a steady decline in the polls for the SPD – a situation not unfamiliar among other junior parties in coalition cabinets around Europe. The GroKo was therefore highly unpopular within the SPD party establishment, which on 21 January only narrowly (362 votes to 279) gave the green light for formal negotiations to begin with the CDU/CSU, explicitly asking for concessions on healthcare insurance, the labor market and refugees. These concessions have not materialized, so a green light from the SPD’s individual members is far from certain. Adding to the uncertainty are more than 24,000 new members who have joined the party from the start of the year to 6 February. This takes the number of members eligible to vote in the ballot on a grand coalition to 463,723.

New elections

What if the members say ‘no’? New elections would be inevitable. A number of SPD leaders would have to resign. More importantly, the political career of Chancellor Merkel would probably end abruptly, as her gamble on the GroKo would have badly misfired. Germany would be thrown into political turmoil. Elections would take months to organize, and any progress to strengthen the architecture of the eurozone along the lines that were cautiously suggested by Macron would be absent. According to the latest polls, even a GroKo would after the elections no longer have a majority in the German parliament, where disunity would increase. A new generation of German leaders would suddenly take over.

Even if there will be a GroKo after all, there are reasons to be pessimistic about substantial progress being made on Europe. There has been lots of brouhaha about the six of the 177 pages of the coalition agreement dedicated to Europe, but to be honest the chapter is short, vague, and conspicuously silent on vital issues such as the completion of the banking union.

Things could turn out to be much worse, however. On 4 March, the result of the internal SPD vote will become known. Some nail-biting lies ahead.

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