Rethinking Europe

German Politics: Bad News for Merkel

Germany’s center-left SPD will be led in the future by a little-known left-wing duo that is highly critical of the SPD’s role in Angela Merkel’s government.

Credit: 360b Shutterstock.com

Takeaways


  • The vote by SPD members in favor of Saskia Esken/Norbert Walter-Borjans can be seen as a vote against Merkel’s grand coalition.
  • In stability-conscious Germany, bringing down a government and triggering new elections is seen as a vote-loser rather than a vote-winner.
  • The SPD has more to fear from new federal elections than any other party. Polling at around 15%, it could lose over a quarter of its seats in the Bundestag.
  • The membership vote against finance minister Scholz means that the SPD could fare even worse in an election than current polls project.

The vote by SPD members in favor of Saskia Esken/Norbert Walter-Borjans can be seen as a de facto vote against political stability and against the current “grand coalition” between Merkel’s CDU/CSU and the SPD.

The result need not spell the end of the government and thus of Angela Merkel’s reign as chancellor. But the outcome of the SPD membership ballot raises the probability that the SPD will walk out and bring down Merkel within the next six months.

Heading for trouble

Esken/Walter-Borjans will be formally enthroned at the start of the upcoming SPD convention on December 6th. While it is possible that the SPD may decide at this party convention to leave the government, it seems much more likely that the SPD will instead ask to re-negotiate the current coalition agreement with the CDU/CSU and set tough conditions for staying on as Merkel’s junior partner.

If the two parties cannot agree to push German policies further to the left, which SPD activists desire, the coalition would end. In that case, Merkel may stay on for a month or two at the head of a minority government before paving the way for new elections, possibly in March.

That she could head a minority government until Germany’s rotating presidency of the European Council (July to December 2020) is over seems unlikely. Merkel would almost certainly not run again in new elections.

Three reasons why Merkel may still remain in power

For three reasons, the SPD may still decide to stay in the coalition with the CDU/CSU and thus let Merkel remain chancellor until the regular end of her fourth term in September 2021:

1. Unlike SPD members, most SPD voters at the ballot box in the September 2017 elections as well as the majority of the SPD parliamentary party in the German Bundestag were in favoor of Scholz.

According to a “ZDF Politbarometer” opinion poll, SPD voters had preferred Scholz/Geywitz over Esken/Walter-Borjans by 38% to 22% with 40% undecided. At the party convention, major parts of the SPD establishment will likely make the case for staying in power.

2. The SPD has more to fear from new federal elections than any other party. Polling only at around 15% instead of the already dismal 20.5% it had garnered in 2017, the party could lose more than a quarter of its seats in the Bundestag.

The membership vote against finance minister Scholz and in favoor of a little-known left-wing duo deepens the party’s crisis even further. As a result, the SPD could fare even worse in an election than current polls project.

In contrast, the CDU may attract more swing voters in response to the SPD’s tilt towards the less responsible left. For the time being, the SPD’s parliamentary faction would very much like to avoid such an outcome.

3. In stability-conscious Germany, bringing down a government and triggering new elections is seen as a vote-loser rather than a vote-winner.

Will the CDU dig in its heels now?

Re-negotiating the coalition agreement with the CDU/CSU, as the SPD now proposes, in order to appease its left-wing, will not be easy. While Merkel may be inclined to give further ground to grant her government a new lease of life, many in her CDU are fed-up with a coalition partner that is turning ever more left-wing and ever less reliable.

Having yielded the post as CDU chairwoman to her would-be successor Annegret Kramp-Karrenbauer (AKK) a year ago, Merkel’s influence over the CDU is now quite limited.

For Annegret Kramp-Karrenbauer, the best option to ever become chancellor may be to go for new elections soon. After all, her various rivals within the CDU have not yet mustered the strength to deny her the pole position as the party’s candidate for the top office.

The pivotal party – the Greens

In theory, it might still be possible to avoid new elections even if the SPD left the coalition. The CDU/CSU could strike a deal with the Greens and the liberal FDP instead.

However, the Greens are riding high in opinion polls with support at around 22%, well above their 2017 election result of just 8.9%. They would thus probably insist on new elections before they might join a government thereafter.

If the SPD leaves the coalition with the CDU/CSU, any new government would almost certainly have to include the Greens. After new elections, all parties would still shun the right-wing AfD (around 14% in polls) and neither the small liberal FDP (around 8%) nor the CDU/CSU (around 27%) would work with the Left Party (around 9%).

Short of a dramatic upset, new elections in, say, March 2020, could thus result in one of two outcomes:

1. The Greens join the CDU/CSU as junior partner; or
2. The Greens team up with the SPD and the Left Party instead.

Including the Left Party in a government no longer seems to be taboo for the Greens. Moreover, such a potential coalition of the combined left is tantalizingly only 1-2 points short of a majority in current polls.

The option could be attractive for the Greens. As the senior partner in such a government, one of their two leaders, the more charismatic Robert Habeck or the more policy-focused Annalena Baerbock, could then be the next German chancellor.

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About Holger Schmieding

Holger Schmieding is chief economist at Berenberg Bank in London. [United Kingdom] Follow him @Berenberg_Econ

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