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German Chancellor Angela Merkel looks left again as she sets up a new 'Grand Coalition' the Social Democrats. Courtesy of Bernd von Jutrczenka/dpa

Germany’s New Government: Strong and Stable. Not

Jonathan Eyal
Commentary, 9 February 2018
Germany
Germany’s new ‘Grand Coalition’ is neither the answer to Europe’s problems, nor the stability the country craves.

Hallelujah. After more than four months of political haggling, Germany at long last has a government, a Grand Coalition – or GroKo as it is now known by its German-language acronym – composed of the Christian Democrats (CDU) and the centre-left Social Democrats (SPD).

Chancellor Angela Merkel, who is now assured of a fourth consecutive term in office, promptly hailed this as ‘a good foundation for a stable government’. Other European governments added their own congratulations; at long last, they claim, Germany is poised to resume its traditional role as the leader of the continent, to chart its destiny

But the reality is that the new German government – which will not be formally constituted until at least the end of next month since it is still requires approval by the SPD’s rank-and-file – is not looking to the future, but to the past.

It will be neither stable, nor the foundation of a good governance. And instead of charting to Europe’s future, it will struggle to maintain the continent’s current arrangements.

To some extent, both the CDU and SPD can claim that they are merely acting responsibly concerning Germany’s future

At every level, this government is merely a prelude to a new Germany, one which is yet to be sketched out.

Neither Merkel’s CDU nor the SPD wanted this deal; both view a coalition agreement as harmful to their long-term interests. But an agreement became inevitable after Germany’s inconclusive general election last September, and Merkel’s subsequent failure to set up a coalition with two other German parties, the free-marketeer Free Democratic Party and the Greens.

So, to some extent, both the CDU and SPD can claim that they are merely acting responsibly concerning Germany’s future. The alternative to the current government would have been a minority government followed by early elections that would have produced a splintered parliament very similar to the one Germany has today.

Still, it is worth recalling that just about the only clear message from last September’s election was that the German public was tired of the previous CDU–SPD GroKo. The CDU scored its worst electoral result since the current federal republic was established, while the SPD ended up with its worst result since the 1920s; between them, Germany’s two biggest parties lost a total of 105 seats, out of the 709-seat Bundestag.

But what is now the outcome of an election which rejected a GroKo? Another grand coalition, with precisely the same actors. Do not be surprised therefore if, instead of taking the wind out of the sails of a variety of nationalists, populists and other extremists, such as the Alternative for Germany or Germany’s Left (the former communists), the current GroKo merely fuels the splintering of Germany’s political life.

The consensus among politicians in Berlin is that the SPD drove a hard bargain. At 153 MPs against Merkel’s 246, the SPD are very much the junior partner in the coalition. But that is hardly noticeable in the 177 page-long coalition agreement signed this week, which is peppered with socialist electoral priorities.

Germans in the higher tax brackets are likely to be angered by Merkel’s quick abandonment of her electoral promise to cut the country’s overall tax burden

More money is being pledged for social welfare and care for the elderly, for implementing fast broadband internet connections, boosting housing construction or fixing Germany’s roads.

With a booming economy and state coffers full, Merkel can afford to buy her coalition partners’ loyalty: the country’s national finances will probably enjoy a surplus of €45 billion over the next four years, so spending promises can be kept while still upholding the government’s determination not to borrow.

Nevertheless, Germans in the higher tax brackets are likely to be angered by Merkel’s quick abandonment of her electoral promise to cut the country’s overall tax burden, and especially by her failure to eliminate the hated ‘Reunification Tax’. This was supposedly a temporary surcharge introduced in the early 1990s to finance the integration of the former communist East Germany, but still enforced a quarter of a century later.

German taxpayers may also be unimpressed by another promise in the new coalition agreement which declares that Germany is ‘ready to contribute more to the European Union budget’.

'French President Macron may well have been invited to join the government', quipped Alexander Gauland, the leader of the far-right Alternative for Germany

This hints at the possibility that the new German government would be prepared to accept proposals put forward by French President Emmanuel Macron, who effectively suggested the creation of an automatic system to bail out EU nations in financial difficulties, precisely what the Germans have opposed for decades.

The unpopularity of any German move to accept the French proposals for financing the EU is sure to be exploited by opposition parties; ‘French President Macron may well have been invited to join the government’, quipped Alexander Gauland, the leader of the Alternative for Germany, the far-right movement which came out of nowhere to become Germany’s third-biggest party at the last elections.

Yet the biggest surprise has been the number of ministries which the CDU have been able to secure in the new government. They not only got the foreign ministry, which was always assumed to be theirs, and a bevy of other junior ministers, but also the all-powerful finance ministry, which controls the purse-strings.

This came as a shock to Merkel’s supporters, many of whom were hoping for promotion; ‘At least we still have the Chancellery’, tweeted ironically Olav Gutting, a fast-rising 47 year-old Christian Democrat MP, who will now languish on the backbenches.

The fight to be Merkel's successor is about to begin, and the battle for the soul of the Christian Democrats will soon erupt

Despite the generosity of the deal they obtained, it is by no means certain that the SPD’s 400,000 rank-and-file will support the coalition arrangement. But even if the deal is approved and a new government starts functioning by the end of next month, Merkel is unlikely to enjoy her time in office.

The fight for her succession is about to begin, and the battle for the soul of the Christian Democrats, which have made so many concessions to the SPD, will soon erupt.

Then, there is the tiny matter of the electorate. Current opinion polls indicate that the SPD is supported by only 17% of voters, not that much more that the Alternative for Germany, hitherto just a fringe party.

And, for the first time ever, Merkel’s new government commands the support of barely half the German public. Not promising omens for an administration supposed to last for the next four years.

As Josef Joffe, a seasoned German commentator – albeit a conservative-leaning one – put it: the current GroKo is a ‘government of losers’.

Banner image: German Chancellor Angela Merkel looks left again as she sets up a new ‘Grand Coalition’ with the Social Democrats. Courtesy of Bernd von Jutrczenka/dpa

The views expressed in this Commentary are the author’s, and do not necessarily reflect those of RUSI or any other institution.

Author

Jonathan Eyal
Associate Director, Strategic Research Partnerships

Dr Eyal is the Associate Director, Strategic Research Partnerships, and International Director, at the Royal United Services Institute... read more

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