Merkel 4.0: Chancellor Merkel’s marathon continues

The election result has reduced Merkel’s authority and introduced new domestic constraints, just as space for new possibilities at the EU level are opening up

Simon BulmerAnalysis of the German election held on Sunday 24th September has tended to focus on two features: the re-election of Chancellor Merkel alongside the new threat to German politics posed by the electoral success (with 12.6 per cent) of the right-wing Alternative for Germany party (AfD). These are the headline developments but important too are the ramifications of the election result for the future of the EU and the Eurozone. Merkel’s domestic political ‘wiggle-room’ has narrowed considerably at precisely the same time that new possibilities exist at EU level thanks to proposals from President Macron in France and European Commission President Juncker. The new coalition could be challenging for Merkel.

The election took place on the same day as the Berlin Marathon. Merkel’s victory looked assured throughout the long electoral race apart from for a few brief weeks. Unlike in the marathon, where there were 20,000 competitors there was only one plausible rival chancellor candidate to Merkel, namely Martin Schulz of the Social Democrats (SPD). The ‘Schulz-effect’ proved short-lived, however, as his novelty was wearing off by April 2017, only weeks after his selection in January as chancellor-candidate and in March, with unanimous support, as party leader. The SPD result (20.5 per cent) was the worst in its history: a disaster for the party. The immediate consequence for the SPD was the decision to announce it would not continue in a Grand Coalition with Merkel’s Christian Democrats (CDU).

Merkel’s ability to maintain momentum over the coming four-year parliamentary period will be very tricky. Whilst her approval ratings remain good, the vote share of the two Christian Democrat parties’ (the CDU and CSU) dropped to 33 per cent, down 8.6 per cent on 2013: their worst result since 1949. The Bavarian Christian Social Union (CSU) polled poorly by its own standards. It had been critical of Merkel’s refugee policy, demanding an upper limit to numbers. Yet it then campaigned for the election alongside the CDU, creating a credibility problem for itself whilst having given oxygen to the refugee problem that doubtless helped the AfD campaign. The CSU will likely insist on more conservative policies in the new coalition than those pursued by Merkel in the last government, including a cap on refugees. This is a further constraint on Merkel’s coalition-building, reinforced by the CSU’s focus on Bavarian state elections in 2018.

In order to form a coalition, in light of the SPD’s decision to return to opposition, Merkel will need to forge a ‘Jamaica coalition’, comprising the CDU/CSU, the Free Democrats (FDP) and the Greens (black, yellow and green respectively). At the last election the FDP not only left government but the Bundestag, for it failed to pass the 5 per cent threshold for representation. Under its new charismatic leader, Christian Lindner, the FDP is promoting its liberal-economic preferences. With 10.7 per cent of the vote it sees itself as the party of entrepreneurship. It promises an insistence on sound money policies in the Eurozone: a constraint on the economic policy of Merkel. A strengthened Eurozone budget would be a red line according to Lindner.

Apart from running a minority government—an unlikely scenario—the electoral arithmetic only stacks up if the coalition includes the Greens. Where the CSU is conservative, the Greens are cosmopolitan. Where the CDU and especially the FDP are pro-business, the Greens support the environmental agenda. Where the FDP favours sound money in the Eurozone, the Greens support more solidarity with debtor states. And there are always divisions within the Greens between those who are prepared to be pragmatic—like the current leadership—and some activists. This will be a tricky coalition to form and retain stability.

I was able to attend the electoral night party of the Greens. Due to a slight increase in its vote (8.9 per cent) there was much cheering amongst the party faithful as the first estimates of the results came in. There was booing at the result of the AfD and near-silence when it became clear that a Jamaica coalition was necessary due to the parliamentary arithmetic. Their likely participation in government seemed to surprise party supporters.

The entry of the AfD into the Bundestag brings a far-right party into the Bundestag for the first time since the very early post-war years. That represents a seismic shift for Berlin politics. The AfD’s campaign walked a very fine line between racism and protest. However, the inclination of some political opponents to refer to the AfD as Nazis may well have been counter-productive.

The AfD will find life complicated in the Bundestag. It will break taboos, for sure. Yet on many bread-and-butter issues, such as pensions, its policies are unclear. It will have to develop them fast because much of the Bundestag’s power is via its committee work. The SPD decision to go into opposition at least prevents the AfD becoming the official opposition (with, for instance, the chair of the budget committee).

The AfD is a Euro-sceptic party but not anti-EU. Its preference would be a return to 1992: the pre-Maastricht period of the single market project. The Euro and the open borders of the Schengen zone are a completely different matter. This party is now going to be waiting to pounce on any slips by the new coalition, while pursuing a populist policy line. It will be a fierce critic of further European integration or of a larger Eurozone budget.

Will the AfD endure over the longer term? Such parties are often hampered by internal division and—as if to bear this out—the co-leader Frauke Petry announced at the party’s post-election press conference that she would not be joining the AfD parliamentary group and would sit as an independent. She had wanted a more moderate electoral strategy. Yet the AfD will have over 90 seats in the Bundestag and reap substantial income from the party finance system. This will give it significant resources for the future.

So how will things work out for Chancellor Merkel, the ‘Queen of Europe’? First she is going to have to devote much more attention to domestic politics. Several months will likely be needed to assemble a coalition agreement and the necessary compromise. Second, this situation will be very evident indeed on EU policy. As the EU’s most senior politician, she will have reduced authority to lead. A ‘Jamaica coalition’ will comprise more divergent views on the Eurozone than ever before, notably on proposals to have a Eurozone finance minister, a Eurozone budget and so on. The prospects of significant progress look much reduced compared to under a grand coalition with the SPD. Stronger defence cooperation may have better prospects, as the domestic constraints are much reduced and Brexit has raised questions about the UK’s reliability as a partner.

Third, the refugee issue and the wider EU migration regime will retain great salience. They will be policed by the AfD, since this set of issues helped the party to get where it is today: away from its original incarnation, which was critical of the Euro. The CSU will police these matters from inside the coalition.

Just when new proposals on strengthening the Eurozone and the EU are emerging from French President Macron, the constraints have increased significantly in Germany. German leadership may well be reduced and its power deployed more obstructively.

Merkel’s skill as a broker of agreements is going to be much needed at both domestic and EU levels. Merkel’s electoral marathon is at an end. Her stature is somewhat diminished. For past federal chancellors achieving a fourth term (Adenauer and Kohl), the experience has turned sour. The same fate will be a danger for Merkel.

Note: thanks to the German Academic Exchange Council and the International Association for the Study of German Politics for organising the election trip that I participated in.