Will Germany See Red Soon?
Germany’s parties on the left are only a few percentage points short of a potential majority.
- Germany's parties on the left are only a few percentage points short of a potential majority.
- If the SPD leaves the coalition with the CDU/CSU, any new government would almost certainly have to include the Greens.
- As the senior partner in a “green-red-red government,” one of the two Green Party leaders -- Robert Habeck or Annalena Baerbock -- could become the next German chancellor.
- It is probable that the coalition of the CDU/CSU with the center-left SPD will stick together throughout 2020, allowing Merkel to remain in office.
Combining their respective percentages in recent opinion polls, the three parties on the left of German politics – SPD, Die Grünen and Die Linke – are closing in on having a majority at the national level.
The new German question?
German politics may provide interesting headlines in the next few weeks. Following the CDU national party convention, the SPD is going to have its national convention from December 6-8.
Contrary to what many believe, the key issue is not for how long Angela Merkel will remain chancellor or whom her center-right CDU/CSU may nominate as her would-be successor.
Instead, watch what the SPD and the Greens do. Their next moves could decide whether German policies tilt significantly to the left after potential snap elections in 2020.
A Green chancellor after Merkel?
At present, there may be a 70% probability that the coalition of the CDU/CSU with the center-left SPD will stick together throughout 2020, allowing Merkel to remain in office. At present, the risk that the SPD walks out of the coalition stands at 30%.
This includes a 5% probability that Merkel manages to soldier on at the helm of a minority government and a 15% probability that her CDU/CSU, under a new leader, enlists the Greens as their new junior partner to pursue a fairly similar policy agenda.
This leaves a tail risk of 10% that, after new elections, a coalition of the combined left led by a Green chancellor could govern Germany instead with a significantly more leftist agenda.
New SPD leaders could reshuffle the deck
After the second round of a membership ballot, which lasts from November 19th to 29th, the SPD will announce on November 30th whether the moderate finance minister Olaf Scholz jointly with Klara Geywitz or the left-wing duo of Saskia Esken/Norbert Walter-Borjans will lead the party in the future.
If Scholz/Geywitz win, the SPD would almost certainly remain in coalition with the CDU/CSU under Merkel. That would dispel the political risk for the time being.
However, if Esken/Walter-Borjans prevail instead, the risk that the SPD pulls out of the Berlin government would rise to 45%. In turn, the probability that snap elections could bring a coalition of the combined left to power next spring would go up to at least 15%.
The pivotal party
If the SPD leaves the coalition with the CDU/CSU, any new government would almost certainly have to include the Greens. Now polling at more than 20%, the Greens would likely insist on snap elections beforehand.
After a new vote, all parties would still shun the right-wing AfD (around 15% in polls) and neither the small liberal FDP (about 8%) nor the CDU/CSU (approx. 26%) would work with the Left Party (9% or thereabout).
Short of a dramatic upset, new elections could thus result in one of two outcomes:
• Option 1: The Greens join the CDU/CSU as junior partner.
• Option 2: The Greens will team up with the SPD and the Left Party instead.
Including the Left Party no longer seems to be a taboo for them. Such a potential coalition of the combined left is currently only 1-2 points short of a majority in current polls (see chart below).
The option could be attractive for the Greens. As the senior partner in a “green-red-red government,” one of the two Green Party leaders, the more charismatic Robert Habeck or the more policy-focused Annalena Baerbock, could become the next German chancellor.
A green-red-red government at the national level would face some restraints. It would be hemmed in by the upper house of parliament. The CDU/CSU could still wield a veto against major shifts in tax and European policies in this chamber of state governments for the foreseeable future.
But even without exerting majority control over the Bundesrat, a green-red-red coalition of the left may still re-regulate parts of the German economy such as the labor and housing market significantly and impair trend growth as a result.